yes you need to configure an SMTP account used to send outgoing emails. This is nothing different as in your desktop mail client and honestly the official docs you refer to is pretty clear (but I agree different options mentioned there might be confusing for a beginner). read the docs and search for things you don’t understand… especially SMTP is not really part of Nextcloud - most of the parts of SMTP docs are “commodity terms” you have to go through the rabbit hole - don’t expect beginner level speech everywhere - think from the other perspective - you are experienced admin and the docs contain “useless” stuff you learned years ago - would you appreciate this?
my first attempt to describe this is 101: logging, which logs exist, how to acces and understand but the topic is maybe the most sophisticated in the whole IT area - bare with me if it is incomplete
you have a very steep learning curve ahead carefully work through the 101: Self-hosting information for beginners and other 101 guides and gather at least basic knowledge of the topics mentioned there.
As a beginner you have different view on docs and guides than me being in IT business since 20y - you are welcome to create (start) topics showing the problems you hit and the community will try to support you on your way to professional self-hosting admin.