Regarding (D): After 'near by ' you have to stop. The hotel is located nearby. (near here) There is a post office nearby.
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Hiroshi'Lucy was staying with her aunt in the nearby town of Hamilton.'In this case, 'nearby' is followed by a landmark.But the preposition is "in". "nearby" is not used as a preposition here, but as an adjective to modify 'town'.
HiroshiThe Belamar is also located nearby the lively areas of El Segundo and Redondo Beach.There may be regions where this is accepted, but in my opinion it's not the best English.