The complicated word here is: Prudery.
Let's operate under the assumption that we do not know what it means.
[Something] actually brings attention to a vice (negative trait) when it is supposed to _____.
This sentence being phrased as "actually brings attention to" makes it sound as though this is opposite to the intended effect. You would say something like: "The food actually tasted pretty good." if the expectation would be that the food was no good. So if something "actually" brings attention to a trait, the implication is that it would normally have to hide the trait. We are looking for some word that means to hide!
The act that does not allow speech or sight ______ what is hidden.
Continuing from above, the implication is still the same. If something is supposed to disallow sight/speech, but (due to the structure of the first sentence) we know the opposite is true, what happens? It must exaggerate or bring attention to the speech/sight.
(A) Repress - means to restrain or prevent. This is a pretty good fit for "hide".
(B) Condemn - means to express disapproval of. This really is not opposite enough to "bringing attention to" to fit in the sentence.
(C) Divulge - means to make known. This is the opposite word to "hide". The first sentence could have actually used divulge: ".. actually divulges the vice it is supposed to ___."
Thus (A) must be the correct answer for the first blank!
(D) Dramatizes - means to exaggerate (typically exaggerate somethings importance.) This is a pretty good fit for our word.
(E) Distorts - means to make something unclear. This is not specific enough for our context.
(F) Conceals - means to hide. This is again the opposite to the blank. The sentence could have read "the very act that conceals speech or sight ____ what is hidden."
Thus (D) must be the correct answer for the second blank!
Prudery comes from the word "prude." It is essentially the behaviour of those who are (too) easily offended. The purpose of prudery is to stop offensive behaviour. Knowing this helps slightly, though as shown above, it is ultimately unimportant!