Newsletter Groups - Subscribe Defaults

I have two groups for Newsletters. One is for Members and the other is for those who are not Members but wish to get the Newsletters.

I am not sure to do deal with the settings. I put Default Group to be Newsletters, but then what happens is that my Members get registered for Newsletters instead of Members.

How do I set Newsletters for the default for the Subscribe widget but also automatically subscribe Members to the Members group (not Newsletters).

Also, I am not being notified when people subscribe to get the newsletter. Where are the settings for me to be notified please.