unable to select site design

Are you on the trial?  I don't think you can add a 'working' email until you have chosen a plan.  It's been awhile since I started a website from the "try it for free" button, but once you put your temporary website name in there, it should show you a "pick a template" option and you start from there.  Are you not seeing this?

It kind of sounds like your domain name is "set" already so it may looking for a website that doesn't quite exist yet.  This is just a guess.  So if you are on the business plan, you should be able to make more than one site (like I have 20+ in my account that I have built over more years than I will admit)  just for fun, go to your Website Manager page. This option is on the left column of the sign-in page You can always get to this main page by clicking on the  logo in the upper left corner.   On the website manager page 1) what do you see in the website name bar (kind of mid center) and do you see "Add A New Website"" in the upper right part of the page?

So it's late here and I'm retiring for the evening.  What I would suggest is that, if you have the option, use the Add A New Website feature, name your site something similar to what you want and for now it will be "thenameIpicked.homesteadcloud.com'  nobody can see it yet and you will be able to get your domain attached easily later.  This gives you a fresh site & name to work with.  If you do this, I promise you will see and be able to use the "choose design" and get started.  When the site is ready, you will be able to go to the Domain Manager tab on the sign in page and "attach" the domain name you purchased to the site you just built.  I think once you have the site built, you will be able to set up the emails pretty easy.  If you choose to set up the emails now (which you CAN do by clicking the EMAIL option on that main page list) you will have to temporarily forward them to an existing email, since the actual domain is not actively online, or it will be attached to that temporary .homesteadcloud.com name.  It is better to wait. 

Hello,

You getting that error when selecting your design because the email you used to create your account is attached to another account that was closed with a past due balance. You would either need to reopen that account and pay the past due amount, or change the email on file to one that has not been used on Homestead in the past.

For future reference, Homestead support here in the Community is available from 6:00 AM to 5:00 PM MST.
Phone support is available during the same hours 1-800-710-1998