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the question concerns exactly this part of the speech:

i am not now thinking of the loss of property involved, immense and serious as that is, but only of the wanton and wholesale destruction of the lives of non-combatants, men, women, and children, engaged in pursuits which have always, even in the darkest periods of modern history, been deemed innocent and legitimate. property can be paid for; the lives of the peaceful and innocent people cannot be.

president wilson talks about the lives of people destroyed by german army. but these people are not americans, they are the local people living in europe. the president mentions the barbarity of germans, considering that he is not targeting the nation, instead it is said about german army. the correct answer is the last one.

yes yes it does !

the present continuous is a verb tense which is mainly used to indicates that an action is in progress at the moment of speaking.  

it is formed using: person + verb to be (am/is/are) +verb + - ing form  

example: i am studying at this moment .

in addition, the present continuous is also used in order to express things that will or will not happen in the near future.

example: i am having dinner with some friends tonight.

the speaker sometimes   uses it   to express that an action is repeated and it causes irritation on the part of the speaker

example: my sister is constantly complaining about everything.