This a Describe the Role question.
We should first read and understand the argument core, and then we'll ask ourselves whether the claim in question is a conclusion, premise, subsidiary conclusion, opposing point, or background fact.
After a first read, it's a little tricky to figure out what the Main Conclusion is.
On one hand, it felt like the first sentence could be the conclusion, since everything that follows it seems designed to support the idea that gratitude can't be expressed anonymously.
On the other hand, we have a "THUS" to begin the final sentence. Language such as "thus/therefore/hence/so" always indicates a conclusion, but it doesn't necessarily indicate the main conclusion.
Remember, some arguments have subsidiary/intermediate conclusions: ideas that have a supporting premise but ultimately are there support an even bigger claim.
Main Conclusion and Describe the Role questions are notorious for NOT putting the main conclusion as the last sentence and NOT making it obvious by using a term like "thus/therefore/hence/so".
(The main task in Main Conclusion and Describe the Role is to find the conclusion, so LSAT needs to make that task trickier than usual)
Does the 1st sentence support the 3rd, or does the 3rd sentence support the 1st?
We can use the Therefore Test to see which ordering makes more sense.
You shouldn't express gratitude anonymously.
THEREFORE
The social function of reinforcing good behavior only works if the benefactor knows the source of gratitude.
or
The social function of reinforcing good behavior only works if the benefactor knows the source of gratitude.
THEREFORE
You shouldn't express gratitude anonymously.
The second ordering is much more logical. This means that the 3rd sentence is designed to support the 1st sentence.
Our whole argument breaks down like this:
MAIN CONC:
Obligation to express gratitude can't be satisfied anonymously.
(why?)
SUBSIDIARY/INTERMEDIATE CONC:
[because] The social function of reinforcing good behavior only works if the benefactor knows the source of gratitude.
(why?)
PREMISE:
[because] Human psych is still driven mainly by personal interaction.
Now that we've deconstructed the argument, we know the claim the question asks about (the 1st sentence) is our Main Conclusion. So we can scan the answers looking for applicable wording.
(E) is the correct answer.
===other answers===
(A) The 1st sentence is not used to support the main conclusion. It is the main conclusion. (The 1st sentence is also not an "illustration", which would be more like a specific example or application of a general rule)
(B) The 1st sentence was not defending against an objection. There is no objection in the argument.
(C) This describes the role of the 2nd sentence, which was a premise used to support the intermediate conclusion, which was used to support the main conclusion.
(D) The 1st sentence speaks of no social benefit. This answer is trying to make it seem like the 1st sentence was used to support the 3rd sentence (but we already analyzed that possibility and judged that the 3rd was used to support the 1st).