Snap settings have nothing to do with quantizing (unless you're using the timing tool). If you're quantizing from the quantize dialog, the quantize value you set in there will be applied regardless of your snap setting.
Similarly, you shouldn't be basing your quantize value on the smallest note length in the passage. You need to figure out where you want each note to go on a note by note basis. For example, if your shortest note is a 32nd and you quantize at 32nd notes, what if all of your notes were intended to be exactly on the beat? Depending on how sloppy your performance was, some of the notes might end up a 32nd note away from the beat - not what you want.
So you have to sit and look at your notes and see how you can group them. For example you might have a passage of 16th notes, so lasso them and quantize them to 16th's. But then you might have a passage of 8th note triplets that will need to be quantized accordingly. And then after that a couple of quarter notes which need 1/4 note quantizing. If you lassoed the whole lot and quantized them to 16th notes, then some of the 1/4 and 8th triplet notes might end up quantized wrongly.
Of course if the piece is rhythmically simple, for example a synth bass part consisting of entirely 8th notes, your job is easy. For everything else, a little work is required.
Don't forget to experiment with quantize percentages too. If you don't want everything too mechanical then try setting the percentage to 90 or 95% instead of 100. And also check out the timing tool. It takes the snap setting as the quantize value. You select a note (or notes) and drag upwards with the timing tool - the notes will move toward the snap setting gradually, so you can quantize them as strongly or as weakly as you like.