The correct answer is C. Sitting in his highchair; modifies baby.
Participles are relatively easy to spot - present participles always end in -ing. A participle phrase includes the participle and all the words connected to it. In the sentence above, the participle phrase is sitting in highchair.
The participial phrase here modifies (or describes) the noun baby. You can easily determine this by asking the question How is the baby poking curiously at his food? And the answer is Sitting in his highchair.