Lookatme sends administrative notifications to the email address entered in:
Settings > More details > Email

Best practice is to use a group email address such as imagelibrary@<yourdomain> and ask your email manager to forward all the emails to your Administrators.

The Receive Update emails setting relates to the targeted emails that you can send to users from Lookatme. This setting does not affect administrative notifications. 

By request, you can also have all emails to end-users copied to an email bucket that you nominate. Clients usually set up a dedicated bucket for this purpose because the volume can be quite large.