Great info! Thanks for the very detailed response.
Yes, members may subscribe using non-Google email addresses. In fact, most members are subscribed in this way.
No Google email address is needed for membership, for receiving group posts as email, or for posting to the group via email.
On the other hand, in order to use the web interface and functions, members do need to have a a Google sign-in account. This does mean that they need to create a Google account and sign in with it when using web functions.
Even in this case, though, members do not need to use a Google email address. A member who has a Google sign-in account can associate any email address with that account (more than one, in fact). If they do this, their Group membership can use their preferred email address. They can also then use their Google sign-in account to access the Group web functions, and they will be recognized as a member based on the association between that sign-in and the address that has membership in the group.