Hi Jackie,
The first conditional you diagrammed is not correct. It's not saying that great novelists must remain in academia. It's saying that novelists in academia cannot be great.
Academia
great novelist
or
Great novelist
academia
Intuitive grasp of emotions of everyday life
academia
We are looking for the assumption required by the argument, so we need to connect the intuitive grasp of emotions in the premise to the great novelist in the conclusion. This is what we see in answer choice (D). We would diagram answer choice (D) like so:
Great novelist
intuitive grasp of emotions of everyday life
Answer choice (E) is not required for the argument. It talks about knowledge of the emotions of everyday life, which may be different from an intuitive grasp of those emotions. Additionally, the answer choice mixes up general analysis and observation skills with observing and analyzing life specifically.
Hope that helps!