2. 
Correct! The answer here is c.
Flipping the sentence around so that "Melody and lyrics" are in the front forces you into a situation of using a possessive. Since the "her songs" can go, the possessive here makes it easier to keep the same meaning. The other possible answer is b, but the meaning would be altered too much from the original. The most concise way then to create a new version would be Melody and lyrics in Ani Defranco's songs intricately intertwine. Notice "her" and "makes" are removed in this simpler construction. Below find some possessive practice activities.

Skill Practice I

Skill Practice II