error 5.7.1 Client does not have permissions to send as this sender
this tells you the issue is not with SQL database mail but with the mail server.
that the mail server is requiring additional security related to impersonation, i believe,
it's probably related to using one mailbox to pretend it's another (ie address is "notifications@mydomain.com", but the credentials are for "alerts@mydomain.com",
you will need to get with your mail administrator on that one, to tell the server that a certain mailbox can send on behalf of other email addresses within the company. otherwise you need to change your mail process to not imersonate as anotheruser, but as the account being used for SMTP.
Lowell