Balance, body flexibility and co-ordination are definitely helped every bit as much as with normal bikes, all forms of cycling being excellent for them. Healthy knee joints don't gain anything from cycling, on the contrary they often suffer long term damage, but the risks of that are very much lower with e-bikes, and that's especially true of low geared bikes like your's which tend to push you into using higher cadences which minimise any chance of damage.
Knee joints which have been severely damaged and suffer arthritis in consequence can tend to seize and lock up, and regular light pedalling of an aerobic nature helps to keep them free. This is where an e-bike can be a great help, enabling the pedalling but without the strain on the knee joints that would increase the existing damage.
Muscle building is a different matter, and the degree of gain there is entirely down to the way the e-bike makes you work, for which see my earlier post spelling out the best bike types for that. If you have a throttle you can of course use that to make you do more of the work by reducing the motor help. To get any large degree of muscle gain I think you'd need to first get as fit as possible on the e-bike, but then switch to an unpowered bike for at least some of the riding as some in this forum have done recently.
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