Notes - Setting up for use with iCloud
Why do I have to enable 'Notes' in both "Settings > iCloud > Notes" and also in "Mail, Contacts, Calendar" > [iCloud account name] > "Notes"?
If I do not set both of these 'Notes' to 'On', the iCloud Notes account does not appear in Notes.app > "Accounts". I just have "On my iPhone".
However, if I do set both to 'On', then I have 2 Notes accounts under iCloud.
Why can't I set just one? Why do I have to set the second one?
What is interesting, is that both of the places you mentioned are redundant. You cannot have "Mail, Contacts, Calendars" > [iCloud name] > "Notes", Off, while "iCloud" > "Notes" is On. If one is on, and you have an @icloud.com (or @mac.com style), the other will automatically be in agreement.
So in short, set one, and other will be set.
This is probably because, Apple provides Settings.app > iCloud for users who haven't chosen to set up an @icloud.com (or equivalent) email address. For users who have chosen to set up that email, the settings become redundant.
Other email accounts under "Mail, Contacts, Calendars" may have the option of notes, in which case it syncs notes you create in the Notes.app with your email accounts (often found under "Notes" somewhere).