I have this setting in my production “Email Preferences” — however I’m still getting scheduled emails from the sandbox environment every day. Is there some other setting I am missing??

I think that should be working. Are you sure you don't have multiple sandboxes and are getting emails from another one? Also check what you have set in your production account options versus in your actual sandbox account. I would assume the sandbox preferences should take precedence, but you know what they say about when you assume...

The setting in production is just the default for refreshes. It's what's set in sandbox that matters