I am trying to find the correct stitch selection to create with the same "look" as the attached file. Whatever settings I choose the design still looks very "tight". Any suggestions on stitch type and adjustments that could give me this look?
It does not look like this is just one setting. I'd start with a tatami stitch and change the stitch length. I'd create a "blog" (object), copy it several times. Set each one with different settings. Change both the stitch length and spacing (density). Then do a stitch out.
I also use the tatami patterns a lot for something like this. I use patterns 37-44 a lot for this because they have random stitch placements to start. Try changing your stitch spacing to about .60 for starters.
Sometimes I will turn off underlay and make two layers each with slightly different stitch settings and a spacing of about 1.20 for each layer.
I suggest you do a few sample "blobs" and then stitch them out. The note on the stitch out what the settings are. This way you can keep it for a reference to start with future projects.
You can also try to use digitize blocks-satin stitch with no underlay and auto split on. Play with settings to make the stitching less dense. I have played around with this a bit, but I'm by no means an expert. Experiment with different stitch types and see what might work for you. The image looks like it was done with thicker thread, which gives it a hand embroidered look.