Step 1: Common names of plants usually describe their appearance. Among the four genera listed, only $Selaginella$ produces slender, needle like leafy shoots ending in small spike shaped strobili.
Step 2: $Sphagnum$ grows in dense cushions in bogs (peat moss), while $Funaria$ and $Polytrichum$ are erect true mosses without any spike like reproductive structure.
Step 3: Matching the descriptive name to the plant, the answer is $Selaginella$.