The correct statement that reflects the changes on a microscopic level leading to the visible changes in the properties of the metal is:
The average speed of the particles increased.
As the blacksmith strikes the metal, the repeated hammering increases the energy supplied to the metal, which in turn raises the temperature. This increase in temperature causes the average speed of the particles to increase, resulting in greater kinetic energy of those particles. With higher kinetic energy, the metal becomes more malleable and eventually glows due to the increased thermal energy.
The other options either do not accurately represent the effects of heating on the atomic level or are incorrect in the context provided.