First, we'd have to ask ourselves how "state action" was being used in the second paragraph.
Let's re-read the beginning of the 2nd paragraph for context:
Line 17-19 - 14th amendment applies to state actors but not individuals.
What do we mean by "state actors"? NOT-individuals.
I guess it would be like if a government AGENCY did something.
In line 19, "where was the state action that invokes the 14th amendment in the case of private contracts?"
So that's saying, when one private INDIVIDUAL makes a contract with another private INDIVIDUAL, where is there a state actor / state action?
i.e. What government agency did anything in this situation?
So I guess I would define "state action" here as
when some government agency does somethingIf we translate the question stem, we're trying to figure out which question helps us determine whether something can be classified as a state action.
So if we put our paraphrase in the form of a question, it would sound like
"Does this question help me decide whether some government agency did something?"
(A) The range of people affected is a CLUE about who did something, but it's not directly informative. Obviously we would associate individual actions with a smaller range of affected people than state actions would affect, but that's a tendency not an absolute.
A state action like the DMV suspending an individual's driver license would primarily affect only that individual, and maybe anyone whom he/she normally has in his/her car.
An individual action like dropping poison in the local water supply would affect tons of people.
So this question would help us guess about whether it's an individual vs. a government agency that did something, but it wouldn't directly tell us.
(B) This is literally just saying "Who did the action?", so yes that would directly tell us whether an action was an individual's action or a state action.
"To what agent can performance of the action be ascribed" = "Who did the action"
Welcome to the world of legalese. You were mentioning that you don't do well at law passages, but you're only going to see more of this crap in law school and in the legal profession, so embrace the journey of getting used to it / getting better at it.
(C) The principles governing an action, like (A), would offer clues but wouldn't directly tell us whether an action was performed by an individual or by the state.
(D) This is very similar to (A).
(E) This is very similar to (C).
Hope this helps.