The instructions state "If a strategy outperforms a benchmark return by 1 percentage point over 30 years, we need to know if that is a significant amount." What does strategy refer to in this context? What does it mean by "outperforms a benchmark return by 1% over 30 years?" And should we make decision about the significance of this strategy as part of our solution?

This does not refer to a particular strategy, but is just cluing you in that the standard error of the CAGR needs to be calculated. So if I have a strategy and it outperform by 1%, and the standard error is 2%, then I have not shown any significant outperformance.