This explanation is a bit longer and may require a video.
When you want to add more depth to your lenticular image, the only way is to blur the background. If you do not blur the background, you will see some "jumping" or "discretization" in the far objects that will ruin the lenticular effect.
Auto blend
Auto-blend adds an artificial blur to the background by blending multiple images. For example, if you have a 40LPI and a 600PPI printer, we all know that we can fit 600/40 = 15 images behind each lenticular lens (approximately).
If you give more image that you actually need, Lentigram is able (when auto blend is on) to mix these images together to blur the background. My personal rule is to use a sequence of 128 images.
I think that the auto blend has been superseded by the bokeh feature now. You can blur the images directly, export them, and use them in the interlacing phase. The only reason why you may want to add bokeh into a lenticular image is to fit more depth (perceived) into the same lenticular sheet.
Side images to blends
This is still a very useful feature. When we create a 3D image, we use a sequence of images that are similar to each other, except for the images at the extremes. If you look at a lenticular image, you know that after a certain angle, the image repeats itself. When this happens, it is very common to see banding because the images at the extremes differ significantly.
With side images for blends, we sacrifice a negligible angle of view to slow down the transition at the extremes, removing this unpleasant banding. The number indicates how many images you are willing to sacrifice at the extremes to remove the bangings. With a 40-something LPI and a 600 PPI printer, I achieve total banding removal with 6 images, with unperceivable loss of view.
With the new video-split feature I can show you the difference. On the bottom is an image with side images to blend = 0, on the top is an imagw with side images to blend = 6.