What does the Mail setting under iCloud apps do?

Typical email has an associated server or two, whether that is located at iCloud or Gmail or ISP or otherwise, and mail client apps are configured to connect to the mail server account to allow the client access to the mail.

iCloud provides mail, and the details can be viewed there, or iCloud mail can be set up there if not already in use.

If you're seeing “iCloud” and not “iCloud Setup”, then you’re using iCloud mail in at least some part.

iCloud Mail uses iCloud storage for all mail stored on the iCloud mail servers.

Donot_Haveone wrote:

What puzzles me is that I was seeing it toggled on, but my iCloud usage is not going over the limit, which it should if messages from *all* of my mail accounts were being *stored* there.

Accessing mail via the iCloud.com webmail client will show you what is stored on the server.

As for how much of your mail is stored where, donno.

Multiple mail accounts are common, and mail can be spread across multiple mail servers, as well as spread across and stored locally on various mail clients.