Think about the difference between "famous for various flowers blooming" and "famous as a place where various flowers bloom" in English. いろいろな花が咲くこと is a characteristic/point the place is famous for, therefore indicated by で. ところ is not "characteristic/point", so your answer いろいろな花が咲いているところで有名 is wrong.
cf.
琵琶湖は広いことで有名だ。
Lake Biwa is famous for its largeness.
琵琶湖は広い湖として有名だ。
Lake Biwa is famous as a large lake.
×琵琶湖は広い湖で有名だ。
彼は頑固なことで有名だ。
He is well-known for his stubbornness.
彼は頑固な人として有名だ。
He is well-known as a stubborn person.
×彼は頑固な人で有名だ。