Alex you are of course correct in saying that the extinguisher should be directed at the base of the fire. But the question ask (where should you be) not (where should you aim the extinguisher). That option was probably put in to catch out the people who could not be bothered to read the question.
You are also correct in saying that 1 or 2 metres would be best. That is why I suggested 1 to 1.5 metres.
Although I not wish to defend the authors of the questions or the CAA, I do believe that some instructors and students are far too keen to criticise the questions instead of applying a bit of logical deduction (cdf) to them. As long as this attitude persists, the reputation of the exams will never improve.
The question of which type of extinguisher to use is a bit of a moot point. You can only use those that are available, and in the cabin of an aircraft the range of choices is extremely limited.