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This solution will meet the requirements by allowing the Lambda functions to access the DB cluster securely within the same VPC without crossing the public internet. The developer can configure a VPC endpoint for RDS in a private subnet and assign it to the Lambda functions. The developer can also configure a security group for the Lambda functions that allows inbound traffic from the DB cluster on port 3306 (MySQL). Option A is not optimal because it will expose the DB cluster to public access, which may compromise its security and data integrity. Option B is not optimal because it will introduce additional latency and complexity to use an RDS database proxy for accessing the DB cluster from Lambda functions within the same VPC. Option C is not optimal because it will require additional costs and configuration to use a NAT gateway for accessing resources in private subnets from Lambda functions.

The AWS Serverless Application Model Command Line Interface (AWS SAM CLI) is a command-line tool for local development and testing of Serverless applications2. The sam local start-api subcommand of AWS SAM CLI is used to simulate a REST API by starting a new local endpoint3. Therefore, option D is correct.

This solution will solve the deployment issue by deploying the new version of the application to one new EC2 instance at a time, while keeping the old version running on the existing instances. This way, there will always be at least four instances serving traffic during the deployment, and no downtime or performance degradation will occur. Option A is not optimal because it will increase the cost of running the Elastic Beanstalk environment without solving the deployment issue. Option B is not optimal because it will split the traffic between two versions of the application, which may cause inconsistency and confusion for the customers. Option D is not optimal because it will deploy the new version of the application to two existing instances at a time, which may reduce the capacity below four instances during the deployment.

This solution will meet the requirements by using AWS X-Ray to enable tracing of application requests to debug performance issues in the code. AWS X-Ray is a service that collects data about requests that the applications serve, and provides tools to view, filter, and gain insights into that data. The developer can install the AWS X-Ray daemon on the EC2 instances, which is a software that listens for traffic on UDP port 2000, gathers raw segment data, and relays it to the X-Ray API. The developer can also install and configure the AWS X-Ray SDK for Python in the application, which is a library that enables instrumenting Python code to generate and send trace data to the X-Ray daemon. Option A is not optimal because it will install the Amazon CloudWatch agent on the EC2 instances, which is a software that collects metrics and logs from EC2 instances and on-premises servers, not application performance data. Option C is not optimal because it will configure the application to write JSON-formatted logs to /var/log/cloudwatch, which is not a valid path or destination for CloudWatch logs. Option D is not optimal because it will configure the application to write trace data to /var/log/xray, which is also not a valid path or destination for X-Ray trace data.

Using Amazon ElastiCache for Memcached to store and manage the session data will reduce the memory load and improve the performance of the web server. Using Amazon RDS for MySQL DB instance to store the application data will provide a scalable, reliable, and managed database service. Option A is not optimal because it does not address the memory issue of the web server. Option C is not optimal because it does not provide a persistent storage for the application data. Option D is not optimal because it does not provide a high availability and durability for the session data.

This solution will meet the requirements by allowing the developer to control what data is sent to X-Ray and CloudWatch from the application code. The developer can filter out any PII from the trace messages before sending them to X-Ray and CloudWatch, ensuring that no PII goes outside of the EC2 instances. Option B is not optimal because it will automatically instrument all incoming and outgoing requests from the application, which may include PII in the trace messages. Option C is not optimal because it will require additional services and costs to use Amazon Macie and AWS Lambda, which may not be able to detect and hide all PII from the trace messages. Option D is not optimal because it will use Open Telemetry instead of X-Ray, which may not be compatible with CloudWatch and other AWS services.

Amazon CloudWatch is a service that monitors AWS resources and applications. The developer can publish custom metrics to CloudWatch that record the failures of the external payment processing API calls. The developer can configure a CloudWatch alarm to notify the existing SNS topic when the error rate exceeds 5% of the total number of transactions in an hour. This solution will meet the requirements in a near real-time and scalable way.