https://documentation.sas.com/?docsetId=proc&docsetTarget=n12jw1r2n7auqqn1urrh8jwezk00.htm&docsetVer The default sort order for PROC SORT in SAS is ascending. This means that if no other sort order is specified, SAS will arrange the data in ascending order based on the values of the variable(s) listed in the BY statement.
Here's an example:
* proc sort data=mydata; by variable; run; sorts mydata by variable in ascending order by default.
The other options are incorrect in the context of the default sort order:
* A. 'Internal' is not a sort order.
* C. 'Formatted' refers to sorting data based on formatted values, not the default order.
* D. 'Descending' is an alternative sort order that must be explicitly specified with the DESCENDING keyword.
References:
* SAS 9.4 documentation for the PROC SORT statement: [SAS Help Center: PROC SORT]

The program fails because option C is correct: you must include the dataset height2 in the DATA statement.
The DATA step is trying to write to a dataset named height2, which has not been defined in the DATA statement. The correct syntax to create two datasets in one DATA step is to list them both in the DATA statement like so:
data height1 height2;
The use of numbers in dataset names is not a problem in SAS, nor is outputting to different data sets within a single DATA step. Additionally, using two different DATA statements for HEIGHT1 and HEIGHT2 is not required and is not the cause of the failure.
References:
* SAS documentation on the DATA statement and creating multiple data sets.

In SAS program syntax, character strings are indeed case sensitive when enclosed in quotation marks. If you compare two character strings of the same letters but different cases, SAS will treat them as different values.
For example, 'Hello' is not the same as 'hello'.
Option A is incorrect because the ampersand (&) is not used for comments in SAS; it is used for macro variable references. Option B is incorrect because global statements such as LIBNAME and options do not require a RUN statement to execute. Finally, option D is incorrect because SAS can process steps with multiple statements on the same line, provided that they are correctly separated by semicolons.
References
* SAS 9.4 Language Reference: Concepts, "SAS Language Elements and Syntax."