The answer:
Contemporary Portland, Oregon is the location of the settling of the passage, the key sentence is the e-mails grew briefer and less frequent. E-mails started to be used in 1971, this locates the passage in a contemporary time. The word contemporary talks about a present time or something that is happening right now.
A fishing community in Portland, Maine can't be selected as the correct answer because the passage doesn't present any information about commercial business in the area.
California during World War II can't be selected as correct either because of two reasons. First of all, we have the sentence -Then, Celeste moved to California - which shows that they were not located in California in the main part of the passage. Secondly, we have the sentence -Celeste wrote to say that she would be coming north to Portland by train for an interview at the university that she expected to attend-. During the war the role of women was focused on helping the army as nurses or even sometimes soldiers, collegue was not a common option for all women as it is now.