Step 1: Break the sequence into two stages.
First, side-chain chlorination of toluene; second, acid hydrolysis at 373 K. We trace each in turn.
Step 2: Do the side-chain chlorination.
In light, the -CH$_3$ group of toluene undergoes free-radical substitution. Putting two chlorines on the same benzylic carbon gives benzal chloride $\text{C}_6\text{H}_5\text{CHCl}_2$.
Step 3: Recognise the gem-dihalide.
Benzal chloride has two chlorines on one carbon - a gem-dihalide, which hydrolyses to a carbonyl compound.
Step 4: Carry out hydrolysis.
Water replaces both Cl atoms with -OH: $\text{C}_6\text{H}_5\text{CHCl}_2 + 2\text{H}_2\text{O} \rightarrow [\text{C}_6\text{H}_5\text{CH(OH)}_2] + 2\text{HCl}$.
Step 5: Collapse the unstable diol.
The gem-diol $\text{C}_6\text{H}_5\text{CH(OH)}_2$ is unstable and loses water to form a C=O: $\rightarrow \text{C}_6\text{H}_5\text{CHO}$.
Step 6: Name the product.
The stable final product is benzaldehyde, option (1).
\[ \boxed{\text{Product = benzaldehyde}} \]