I thought by saving to the most bottom level it would roll up to the top level of of an account record. So for example, instead of saving an email to to an Account or a Contact directly, I thought by saving to a Potential record that, that email would then be visible on the Potential record, the contact record for the contact that was associated with the email, and the account record that the contact is associated with.

This would allow you to look at an account and see all communication history with all contacts at a glance. At the account level you would be able to see all history across multiple things such as multiple Potentials and Cases. Drilling further down into those Potentials and Cases you would then only see the things relating to those specific items 

With all the said it doesn't appear that is at all the case. So what is everyone's recommendation as to where to save communication history?