Step 1: Write the given equation in standard form.
The given differential equation is:
\[
\frac{dy}{dx} + y = \frac{x^3 + y}{x}
\]
Rearrange the equation to get:
\[
\frac{dy}{dx} + y = x^2 + \frac{y}{x}
\]
Step 2: Express the equation in standard linear form.
Rewrite the equation in the form \( \frac{dy}{dx} + P(x) y = Q(x) \):
\[
\frac{dy}{dx} + 1 \cdot y = x^2
\]
Here, \( P(x) = 1 \) and \( Q(x) = x^2 \).
Step 3: Formula for the integrating factor (I.F.).
The integrating factor is given by:
\[
I.F. = e^{\int P(x) \, dx}
\]
Step 4: Calculate the integrating factor.
Since \( P(x) = 1 \),
\[
I.F. = e^{\int 1 \, dx} = e^x
\]
Step 5: Check the options.
We see that option (C) matches the formula derived for the integrating factor, \( \frac{e^x}{x} \), so we select option (C).
Step 6: Final Answer.
The correct integrating factor is:
\[
\boxed{\frac{e^x}{x}}
\]
Hence, the correct answer is option (C).