Final answer:
Natural selection has contributed to the diversity of life on Earth by acting on phenotypes from mutations, causing population divergence through speciation, and selecting for beneficial traits to improve population fitness.
Step-by-step explanation:
Natural selection has played a crucial role in the diversity of life on Earth, stemming from a single common ancestor. Statement A) is correct as natural selection acted on phenotypes resulting from new mutations, contributing to diversity. Statement D) correctly describes how natural selection causes isolated populations to diverge over time through speciation. Statement E) shows how natural selection increases a population's fitness with the prevalence of beneficial adaptations. However, statements B) and C) are incorrect because natural selection does not restrict the number of species globally or maintain a constant species number; it allows for both explosive diversification and extinction, depending on environmental conditions.