Let's evaluate each statement's validity.
Statement A: Atoms of each element emit a characteristic line spectrum when excited. This is a fundamental concept of atomic physics and spectroscopy. This statement is correct.
Statement B: One of Bohr's key postulates for the hydrogen atom is that electrons can only exist in specific, stable orbits (stationary states) without radiating energy. This statement is correct.
Statement C: The density of nuclear matter is found to be nearly constant for all nuclei, regardless of their size (mass number A). It is approximately $2.3 \times 10^{17} \text{ kg/m}^3$. Therefore, this statement is incorrect.
Statement D: A free neutron is unstable and decays with a half-life of about 10 minutes ($n \rightarrow p + e^- + \overline{\nu_e}$). A free proton is considered stable. Therefore, this statement is incorrect.
Statement E: Radioactivity is the process by which unstable atomic nuclei lose energy by emitting radiation. It is a direct consequence of nuclear instability. This statement is correct.
The correct statements are A, B, and E. This corresponds to option (A).