First, let's calculate the magnitudes of the vectors \( \mathbf{a} \) and \( \mathbf{b} \).
The magnitude of a vector \( \mathbf{v} = v_x \hat{i} + v_y \hat{j} + v_z \hat{k} \) is given by:
\[
|\mathbf{v}| = \sqrt{v_x^2 + v_y^2 + v_z^2}
\]
Magnitude of vector \( \mathbf{a} \):
\[
\mathbf{a} = 3 \hat{i} + 2 \hat{j} - \hat{k}
\]
The magnitude of \( \mathbf{a} \) is:
\[
|\mathbf{a}| = \sqrt{3^2 + 2^2 + (-1)^2} = \sqrt{9 + 4 + 1} = \sqrt{14}
\]
Magnitude of vector \( \mathbf{b} \):
\[
\mathbf{b} = \hat{i} - \hat{j} + \hat{k}
\]
The magnitude of \( \mathbf{b} \) is:
\[
|\mathbf{b}| = \sqrt{1^2 + (-1)^2 + 1^2} = \sqrt{1 + 1 + 1} = \sqrt{3}
\]
Comparison of magnitudes:
\[
|\mathbf{a}| = \sqrt{14} \quad \text{and} \quad |\mathbf{b}| = \sqrt{3}
\]
Since \( \sqrt{14}>\sqrt{3} \), we can conclude that \( |\mathbf{a}|>|\mathbf{b}| \).
Therefore, the correct answer is (C).