How can I fix the web-dev-server execution error?

Windows likely doesn't like the fact you are storing/trying to write files in C:/. Since WSL doesn't always tie in correctly with Window's permission systems, even with sudo WSL likely isn't able to change the permissions of those files.

I'd recommend changing directories to somewhere you know your user has ownership of (e.g. your documents library or C:/users/yourusername), and trying again.

I've had a similar issue and the solution that worked for me was clone (or create) my repository inside a WSL sub-directory from HOME, something like ~/workspace/React Study instead of the mounted C:\.

This solution even improve a lot the performance using VS Code integration, specially when you're editing and saving files.