Yet another missing feature that apple has not integrated into the mail app. Sending attachments as others have explained happen within the 3rd party apps, not the ios email app. The email settings they are talking about above are the ios email app settings. aka, you have to have the ios email app set up to send and recieve email. The 3rd party apps then can attach files from within the third party apps and opens the ios mail app with the attachment included.
Its quite silly that apple has not added a simple paperclip to the integrated mail app yet.
As for 3rd party apps for file handling, i came accross a one called FileBrowser. (The icon is a Blue folder with a big FB on it.) It's unique in the way that you can connect to windows based network shared drives and Network Area Storage divices to store files external to you device as well as controle folder organization on your iphone or ipad, etc.
TO APPLE: HURRY UP AND ADD EMAIL FILE ATTACH AND NATIVE WIFI/BLUETOOTH PRINTING TO IOS!!!!!!
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