Step 1: Understand that the phrase is an idiom.
An idiom's meaning is figurative, not literal. Therefore, options (A), (B), and (D), which are literal interpretations, are likely incorrect.
Step 2: Determine the figurative meaning.
The idiom "to hit the nail on the head" means to describe a situation or problem perfectly, or to do something in the most effective and accurate way.
Step 3: Match the meaning to the options.
Option (C), "to do or say exactly the right thing," accurately captures the figurative meaning of this idiom.