Which of the following observations helped Darwin shape his concept of descent with modification? Fewer species live on islands than on the nearest continents. Earthquakes reshape life by causing mass extinctions. Species diversity declines farther from the equator. South American temperate plants are more similar to the tropical plants of South America than to the temperate plants of Europe. Birds can be found on islands located farther from the mainland than the birds' maximum nonstop flight distance.

This sentence conveys the general observation that helped Darwin to support his idea of descent with modification. At the time, Darwin and other naturalists were convinced that the individuals were perfectly suited for their environments. However, by looking at South American temperate species it was clear that they were similar to the species of more tropical environments. Plants were able to acclimate to new environments. This meant that the species could become suited to other environments, and the key for this transformation were the varieties.

The other sentences do not show this concept in the same way.

Fewer species live on islands than on the nearest continents. This concept was assumed to be related to the limited resources in the islands compared to the continents. However, another aspect of life in islands did support Darwin's concept of modification with descent. The species in the islands were more similar to species in the nearest continents.
Earthquakes reshape life by causing mass extinctions. Darwin himself witnessed the effect of earthquakes and considered it a prove of the idea that sudden geological events could wipe out entire ecosistems. He saw this in 1835, during an earthquake in Valdivia, Chile. The shoreline was modified so suddenly and affected the population of barnacles living on it. Naturalists at the time did not know that continental drift was even possible, an idea that became demonstrated until the late 20th century.
Species diversity declines farther from the equator. This phenomenon was widely documented by the time Darwin became a naturalist. The first time it was documented and explained was in 1807 by German naturalist Alexander von Humboldt. This observation proved that there was a correlation between the amount of available resources and the life forms that the ecosystems could support. Therefore, tropics had more diversity because of the more abundant precipitation and sun, for instance.
Birds can be found on islands located farther from the mainland than the birds' maximum nonstop flight distance. This observation would be a proof of continental drift, in the cases were islands were separated from the nearest landmass by means of tectonism. The missing piece of continental drift would explain many of the problems that Darwin could not tackle without this fact.