There's two different questions here:
- Does the email system allow emails to be sent to it over an encrypted channel and send email along an encrypted channel when the recipient's mail server supports it.
- Does the email system encrypt the contents of a mailbox when displaying it to the owner.
gownfawr addresses (1) well.
Gmail does encrypt via default for (2) so when viewing your mail, by default it is done via HTTPS, so a snooper will not be able to observe gmail sending the mail to your browser. I believe the others have not yet followed suite. (Full disclosure, I work for Google).
Gmail is set to use the 'Always use
https' setting by default, ...
"Make Your Webmail More Secure" has instructions for avoiding plain-text reads of a mailbox for a number of large webmail providers, but I cannot vouch for it being up-to-date.
Re your understanding of mail sending, I think you're mostly right, but
email traffic is unencrypted and the messages are passed along many mail servers (in plain text)
No, typically only 2 mail servers are involved for a mail to one recipient. The mail can of course be routed through many network devices as can any message sent via the internet.