Yes I would have accepted the default option so Tile Layer. Just as an FYI I don't have a server I'm just working off a single PC to develop the data then hoping to share with my colleagues via ArcGIS Online.
This will show my level of knowledge of ArcGIS but are your directions intended to be carried out in Online or Pro? I've searched around a fair bit but can't find where to do this step "Open the hosted tile layer's item page" in order to access a Settings page!
Just in case I've 'imported' the aerial image incorrectly I should point out I added it to ArcGIS Pro by using the Map>Add Data>Data from Path option, and pointed it to where the file/s are located on my PC's hard drive.
I don't recall generating any 'Tiles' as such, and will now go away and read up a bit more on what Tiles are exactly!
I would appreciate it if you can assist in prodding me along to resolve this, once I've got the base map sorted I think I'm all good for adding polygons lines and our other assets.