A is correct. In B, the "a" is unnecessary, and in C, if you were to say watermelons you would need to use the verb "are" because watermelons is plural, and make fruits plural also so that all of the word forms match. Also in the plural form you would need to list more than one fruit. For example to correct C, you could say "My favorite fruits are watermelons, apples and oranges."

A. and C. are both correct, since “watermelon” can be used as a countable or uncountable noun, probably because it’s large enough people usually don’t eat the whole thing at once single-handedly. In any case, we do need to use the definite article. To answer your grammar question, let’s consider strawberries. Here are some correct options: My favorite fruit is the strawberry. My favorite fruit is strawberries. (The verb agrees with the subject, not the predicate nominative.) The strawberry is my favorite fruit. Strawberries are my favorite fruit. Personally, I think the last one sounds the most “natural,” although they are all perfectly good options.

A only.