In Passage 1, what can be understood from Lou's
argument at the bottom of page 3?

Lou's argument stems from this:

He wants to avoid hard work.

Lou's elder sister, Alexandra succeeds their father on the land.  And Alexandra proves that hard work pays eventually.  In accordance with the promise she made on her father's dying bed, to look after her siblings and also decide the best use of the land, she persevered until the land became fruitful and was able to enrich the family.  Unlike her younger brother, Lou, who wanted to sell off the land to a land speculator, Alexandra would not be swayed to sell off the land.  She understood that in cultivating the land with tenderness, the land's fruitfulness was enriched.  In the same manner, the fruitfulness of a relationship becomes prominent and enriched when the relationship is cultivated.

Explanation:

O Pioneers! a 1913 novel by Willa Cather was written to extol "the strength and everlasting nature of the land and the ugly and destructive nature of jealousy."  It narrated the lives and experiences of the Bergsons who immigrated from Sweden to Nebraska, US.  At first, their father acquired a massive parcel of land for farming and started cultivating it to sustain the family of Alexandra, Oscar, Lou, Emily, and their mother.  When he died, Alexandra took charge of the land and turned their agricultural activities into a lucrative business that continued to sustain the family and pay for their family needs.

the sentence that avoid faulty coordination is:

culture, which is well represented in philadelphia, plays a major role including theatre, music, and the visual arts.  

faulty coordination occurs when the writer gives equal importance two different ideas (clauses) which in fact are not equivalent. in order to correct a misplaced clause or idea, the writer can place less important or emphatic ideas in a relative clause as in the previous sentence.