I redid the answer, and reread the textbook. Can you check if my answer's right.

Question

The location of Rome is important to the Protestant Reformation because Rome supported the use of indulgences as a mean to raise money for a massive church project the construction of St. Peter's basilica.

Answer 1

Did you even READ Ms. Sue's post below?

http://www.jiskha.com/display.cgi?id=1251413006

Answer 2

Your original question was why was the location of Rome important to the Protestant Reformation.

Your answer above has nothing to do with Rome's location.

I suspect the teacher expects you to know that the "capital" of Catholicism was (and still is) Rome. That's where the Vatican is and where the Pope lives.