Final answer:
The correct sentence is option D, which properly capitalizes the first word of the direct quotation and keeps 'cheese' in lowercase.
Step-by-step explanation:
The correct sentence is D. When Ignacio tasted the Swiss cheese, he remarked, "This is delicious!" In this sentence, the capitalization is correct because 'This' is the first word of the direct quotation and should be capitalized. The word 'cheese' should not be capitalized unless it is part of a proper noun or at the beginning of a sentence, which is why option C is incorrect. Also, the exclamation point is correctly placed inside the quotation marks.