Let $\alpha$ be the coefficient of linear expansion of iron and $\Delta T$ be the increase in temperature. If the original diameter is $D_0$, the new diameter is approximately $D = D_0(1 + \alpha \Delta T)$. The percentage increase in diameter is approximately proportional to $\alpha \Delta T$. If the original surface area is $A_0$, the new surface area is approximately $A = A_0(1 + 2\alpha \Delta T)$. The percentage increase in surface area is approximately proportional to $2\alpha \Delta T$. If the original volume is $V_0$, the new volume is approximately $V = V_0(1 + 3\alpha \Delta T)$. The percentage increase in volume is approximately proportional to $3\alpha \Delta T$. Density is mass per unit volume. Mass remains constant. As volume increases, density decreases. The question asks for percentage increase, so density is not the answer.