Denotation refers to the literal meaning of a word, so the denotation of talkative in the sentence is "talks much," as further explained below.
The term denotation refers to the real, literal meaning a word has. It is opposed to connotation, which refers to the figurative meanings a word can assume when included in different contexts.
The question requires us to choose the denotation for the word "talkative," which is an adjective used to describe someone who enjoys talking or who talks quite a lot. Take a look at the example below:
Options A through C do not convey such a meaning at all, which leaves us with option D. Therefore, when the speaker says "My sister is talkative," they mean their sister talks much. The denotation of the word has been correctly chosen.
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