Hello student! =)
Thanks for the GREAT question!
Your thinking is in the right direction but it's missing one piece of information:
On the SAT, the "which" relative clause is considered to be nonessential, which means there should be commas placed around it.
There is some debate in the "real world" about using the "which" relative clause as a way to specify the noun that came before it. However, for the SAT, as long as you remember that it is nonessential (and the "that" relative clause is always essential), you'll be just fine. =)
If the sentence read,
"The street sign that stood for over 100 years finally fell"
there would be NO commas around the relative clause.
Also, make sure you know that the word "which" isn't always used as a relative clause. It can sometimes be used as an adjective:
For example,
Which coat is yours?
In this case, "which" means "what particular one or ones (out of many). The example sentence is describing a situation where there are several coats, and one person is asking "you" to let him know which one belongs to you. =)
Hope this helps!
Keep up the amazing work!
Keep Moving Forward!
You Got This!
Jin Teacher