The primary meaning is C.
Matthew 18:20 is not spoken in a general context of worship or prayer meetings, but in the context of church discipline (Matthew 18:15–35). Yeshua is describing how a matter of sin is to be handled, and how the leaders of a congregation can take authority in judging matters.
While the verse may be applied to group prayer (especially since Matthew 18:19 speaks of agreement in prayer), its main purpose is to assure believers that when they gather in His name to deal with serious matters of judgment and restoration, He is present to validate and guide that process.
Many believers may indeed misread this verse, assuming that communal prayer has greater power than private prayer; however, in Matthew 6:5-6, Yeshua points out the importance and foundational nature of private prayer for the believer.