In my opinion, the correct answer is A. simile for stories Jamie makes up about himself. Simile is a figure of speech that compares one thing or phenomenon to another, with or without the conjunction "like" or "as". In this case, the comparison to a paper boat obviously refers to "stories about the real Jamie Sabin" that he sets adrift.
By the way, here is the excerpt:
Inside the bus, in his summer Class-A uniform with its brass glitter and infantry-blue shoulder cordon, Jamie Sabin was going home. Fort Benning would be a fading dream; Preston, Virginia, a place unknown, his future. He was in between, fumbling with puzzle pieces, making up stories about the real Jamie Sabin. Each of these he set adrift like a paper boat on a shifting sea of daydreams. He did that encased in the drone and shudder of diesel pistons and hissing tires. Jamie Sabin was going home to a place unknown.