The service account can be set-up either with Exchange Management console or using Active Directory Users and Computers controls.
A standard User Mailbox will inherit the necessary permissions to be able to expand the distribution lists via EWS. A user must have a mailbox for name resolution operations. The mailbox name is not important and will not be utilized for messaging, the credentials, once established, can be input into the PoliteMail Server Manager > Exchange Web Services control page.
Please note, there is a delay between the time the account is created, and the time it becomes available to the system. In other words, if you test the expand DL option within the Server Manager within minutes of establishing the new account, it may not work right away. Give it ten or fifteen minutes and try again.