This is the question:
What I have done:
(a) Show that the equation of the normal to the parabola at a point $(x_0,y_0)$ is $y = {-1\over 2kx_0} + kx_0^2 + {1\over 2k}$
$$ f(x) = kx^2 $$
$$ f( x_{0}) = kx_{0}^2 $$
$$ f'(x) = 2kx $$
$$ f'(x_{0}) = 2kx_0 $$
$$ Normal = -1/m $$
$$ m= {-1\over 2kx_0} $$
$$ y-y_1 = m (x-x_1) $$
$$ y-kx_0^2 = {-1\over 2kx_0}(x-x_0) $$
$$ y = {-1\over 2kx_0} + kx_0^2 + {1\over 2k} $$
(b) Show that the equation of the normal line with the minimum y-coordinate is $ y = \frac{-\sqrt{2}}{2}x + {1\over k} $
$$ y = \frac{-\sqrt{2}}{2}x + {1\over k} $$
$$ {-1\over m} = \frac{-\sqrt{2}}{2} $$
$$ m = \sqrt{2} $$
$$ f'(x) = 2kx $$
$$ 2kx = \sqrt{2} $$
$$ x = {\sqrt{2}\over 2k} $$
$$ f({\sqrt{2}\over 2k}) = {1\over 2k}$$
$$ y-y_1 = m (x-x_1) $$
$$ y - {1\over 2k} = \frac{-\sqrt{2}}{2} (x-{\sqrt{2}\over 2k}) $$
$$ y = \frac{-\sqrt{2}}{2}x + {1\over k} $$
(c) Find the equation of the normal that produces the smallest area between itself and the parabola, and find this area.
This is the part where I'm stuck on.. how do I know which line will produce the smallest area?

Part (a) looks right to me.
For part (b), you need to find the other point $(x_1,y_1)$ as a function of $x_0$, and then find where $\frac{dx_1}{dx_0}=0$. You have started with the answer, and checked that it obeys part (a), but haven't explained why this one has the lowest point.
For part (c), once you have $x_1$ from part (b) and the line from part (a), you can calculate the area $A=\int_{x_1}^{x_0}(y-kx^2)dx$. Then $dA/dx_0=0$ for the minimal area.