Thanks for your question! First, I want to tackle the latter question. In general, anything that is explicitly written in an argument is not an assumption - it cannot be an assumption if it is explicit. However, what you can allow is that a particular premise is dubious or that a particular premise is weak because it itself relies on additional assumptions.
Here, you rightly point out that Willet says "there is nothing new in restricting growth." However, notice that (s)he says this, seemingly based on issues that were discussed ten years ago and then discussed five years ago. You may want to view this statement as a separate premise - and I understand the temptation to do so - but given the construction it is in "Since there is nothing new..." it sounds as though this "there is nothing new" is actually an intermediary conclusion that is flowing from the premises. Once you view it as an intermediary conclusion instead of a premise per se, this makes it a whole lot clearer why you can question it. Once you can question it, answer choice (C), which does indeed question it and weaken it substantially, is a fair option.
That said, it can be more helpful in such tricky situations to work from wrong to right. That is, there would have been good reasons to get rid of the other four answers. In the short version, those reasons are (and there may be others not listed below)
(A) is not too relevant to Willet's argument - it has a scope issue in that we don't care what is necessarily good - Willet uses the word "justified" which is not the same thing. Also, Willet never discusses growth on its own.
(B) is simply not true! There is no personal attack in Willet's argument.
(D) This is out of scope as well - Willet simply does not discuss quality of life.
(E) This certainly could weaken Willet's argument, but at the same time, it is not something we can deduce from the original argument and for that reason it also has a scope issue.
Please let me know if you have any follow-up questions. I can agree that this is not the most straight-forward of questions, but I do think it could have been done mostly working from wrong to right. Let me know if you have any comments or strident disagreement