I've taken Shal's suggestion, and created a mockup page, so we canThanks!
I imagined "Individual Messages" and "All Messages" as the defaults (unless moderators get to choose the defaults), but I suppose the lack of any initial selection is an artifact of the mockup. The latter I think should be "All Messages", not "All Email", as this Option is about message selection.
Maybe the former should be "Individual Emails - You will receive each message in an individual email." for consistency.
I like Frances' re-wording "Daily Digest - Group messages together as one email instead of being sent individually."
I imagined "First Message Also" being enabled only if "Following Only" is selected, to make that connection clearer. I'm not sure if having one control enable/disable another is done elsewhere in Groups.io, maybe it isn't part of the style book.
Visually I'm not so happy with "Follow Replies" hanging there at the bottom. In a way it is a separate option, related to Message Selection but also distinct. Maybe it deserves a heading of its own, "Auto Follow" or something hinting that it is broader than just Message Selection for email - it also controls which threads appear in the "Followed Threads" list(s) on the web site.
I note the absence of the "Special Notices" selection. At first thought maybe you've flip-flopped again, or just decided to keep them out of this discussion. On second thought, maybe it really isn't needed there - it is really a part of Message Selection.
My reason for leaving it in the Email Delivery list was to serve the use case of a member going on vacation or otherwise wanting a simple way to temporarily suspend email delivery - while perhaps still picking up the Special notices.