I'm using TLS for my email delivery, what exactly happens to my data. Is it the data getting encrypted or a secure TLS tunnel is formed and my data goes in that tunnel in plain text?
If you use TLS to send a mail the mail gets send encrypted to the mail server you send it too. This step is similar to accessing a web site with HTTPS, i.e. the plain data get encrypted. But while with HTTPS you talk to the final server directly (end-to-end encryption) the situation is different with mail.
Mail gets delivered hop-by-hop using multiple mail servers until it finally reaches the recipients mail server. There it will be stored in the mailbox until the recipients retrieves the mail. When sending a mail with TLS you only control that the transfer to the first hop is done with TLS. You have no control over the following transfers and apart from that each mail server will be able to see the mail in plain text.
If you need to have end-to-end encryption with mail TLS does not provide this for you. PGP and S/MIME instead do but need to be supported by both sender and recipient which is usually not the case.