In summary type reports, each column is either an aggregated column or a "group by" column. Any column that has a summary function specified in the "Summarize" column on the Query tab is explicitly an aggregated column. All other columns are implicitly "group by" columns. There is no need (and no way) to explicitly designate "group by" columns.
The report source option only needs to be set if the report is using an alternate database, otherwise it defaults to the primary database. For instance, if you have a long running report that would interfere with performance of the primary database, you could set up a separate reporting database that mirrors the primary database, and run the report against the reporting database.