Concept:
Observational drawing is the practice of carefully observing an object and representing it faithfully. It develops visual awareness, analytical skills, and an understanding of form and proportion.
Step 1: Examine each statement.
\[
\begin{aligned}
A. &\ \text{Correct. Observational drawing improves curiosity and visual analysis.}
B. &\ \text{Incorrect. Dream-based or unreal-world drawing belongs to imaginative drawing.}
C. &\ \text{Correct. It is based on observing real objects and representing them faithfully.}
D. &\ \text{Incorrect. Imagination-based drawing is different from observational drawing.}
E. &\ \text{Correct. It is an attempt to study and represent the object as it appears.}
\end{aligned}
\]
Step 2: Identify the correct statements.
The correct statements are
\[
\boxed{A,\ C,\ \text{and}\ E}
\]
Hence, the intended correct combination is
\[
\boxed{\text{A, C and E Only}}
\]
Note: The option list in the question appears to contain a typographical error. Option (3) is printed as A, B and E Only, whereas the correct combination based on the statements should be A, C and E Only.