identify the more acidic compound (and the answer is the III is more acidic than II ).

My reasoning: Consider II compound, we have oxygen attached to the carbon forming a sigma and a $\pi$ bond, this oxygen has two filled p orbitals. The oxygen in the ortho position to it (in II), also has two filled p orbitals. My theory is that as we have filled p orbitals, they can form a $\pi$ bond type interactions (*). After forming the two $\pi$ bonds, the compound is stable.

Now discussing III, applying the same idea as above, there is a larger distance for the $\pi$ overlap and hence I think $\pi$ overlap is less stable compared to the case in II.

Hence, we can say that III is more acidic (**) than II, as the pi overlap of the p orbitals of the two oxygen atoms are farther and long in III, and II is more stable (less acidic) as the pi overlap is over a small distance.

I reached the correct answer but I am not sure if my reasoning for it is correct because I haven't seen directly similar explanations in textbooks, however, I felt this idea was hinted at.

*: Not a $ \pi$ bond in the strong sense of the word

**: Less stable