Where do I set the Include Transaction Type default for invoice? This is for sending the invoice via email.

Not exactly sure where that pertains to. But such preferences are in the Transactions tab of the Set Preferences page and in the Customer record as well (this prevails over the Set Preferences). EDIT: Default in the Email Preference field of the Customer record pertains to Set Preferences.

So this is when an email is sent from the record (in my case invoice). I did find something in suite answers and it looks like you need to create a script in order to have the attachment default to pdf. https://netsuite.custhelp.com/app/answers/detail/a_id/83818/kw/Enhancement%3A%20136423

What I did though in my case is to create a WF (no script needed) on the Customer record (Set Field Value to PDF in the Email Preference field). So when we manually send invoices to customers, the format will be always be pdf (taken from the preference in the Customer record). This is in case you want to use pdf format only which is better in most cases.

Yes. Actually just deployed the script that was in suite answers and it works.