Well, that was my exam in '07. On the day, I found it to be a very reasonable exam. I got bogged down on the forces question because I had a negative in the wrong place and I was coming up with a completely illogical answer and couldn't work out why until afterwards.
As for that question, I've drawn it in paint for you. The position vector maps to different points on the flight's trajectory. This position vector CHANGES direction as designated by r1, r2, r3 etc. at different times. The velocity vector, however, has the same gradient throughout because it's linear and so will always point in the same direction. So when the position vector is perpendicular to the velocity vector, you'll get the minimum distance. Anywhere else and you can make a right-angled triangle out of it with the other position vector not at right angles with the position vector being the hypotenuse (therefore being at a larger distance away).
Hope this was of help
