A 62-year-old woman with a BMI of 34 kg/m² presents with progressive right knee pain and morning stiffness. Weight-bearing AP radiograph of the knee is obtained. The structure marked **D** (joint space) shows narrowing compared to the contralateral knee, with visible osteophytes at the joint margins and subchondral sclerosis. Which of the following best describes the Kellgren-Lawrence grade and the most appropriate first-line management for this patient?