The correct answer is C. satisfying.
Gratifying means giving pleasure or satisfaction. In this case, the speaker is pleased to know that there are not many small-pox cases these days. This is because small-pox is a very serious disease that can be fatal. The speaker is satisfied that the disease has been largely eradicated.
The other options are not as accurate. Pleasing means giving pleasure or enjoyment. While the speaker is pleased to know that there are not many small-pox cases these days, this does not necessarily mean that they are enjoying themselves. Surprising means causing someone to feel astonishment or wonder. While it is surprising that there are not many small-pox cases these days, this is not the main feeling that the speaker is expressing. Happy means feeling or showing pleasure or contentment. While the speaker is happy that there are not many small-pox cases these days, this is not the only feeling that they are expressing.