This is a big question, so I'll answer what I can. I'm going to assume you meant English colonists (calling them "settlers" is now considered unfashionable, as it casts them as people on a mission to civilize rather than invaders subjugating a territory) in what is now the United States. My answer will draw from a scholarly article: Richard Godbeer, "Eroticizing the Middle Ground."

Broadly speaking, male English colonists had mixed reactions to Native Americans. On one hand, early ideas of racial superiority held Native Americans has a separate, inferior people, almost animal-like in their simplicity and savagery. On the other hand, they were intrigued and aroused by the different approaches to nudity and sexuality some tribes demonstrated. The some here is important: "Native American," even if we're only considering the lands east of the Mississippi, encompasses dozens (hundreds?) of different polities and cultures, with wildly varying views on gender and sexuality. While some nations viewed sex in ways similar to European Christians - most acceptable within the bonds of monogamous marriage - others viewed sex as a trade good, or something a gracious host offered to travelers alongside food, drink, and rest. To all sides, the possible advantage of marriage alliances between colonists and natives seemed obvious. When confronted with more open attitudes towards the body and sex, colonists often likened Native American women to the nymphs of classical mythology; young, playful, sexual woods spirits. This could lead to problems, of course. While a native woman might view bathing nude or walking around with bare breasts as normal behavior, colonists could think she was "asking for it," or advertising her sexual availability to all comers. Incidents of sexual assault based on or justified by this misunderstanding were not uncommon.

Despite the allure of native women, it was never very common for English colonists living in colonial towns and cities to take Indian wives. Native Americans as a whole were still viewed as dangerous outsiders who might not ever be able to conform to English and Christian standards. John Rolfe sought special dispensation from Virginia's governor to marry Pocahontas, and based his petition on the grounds that marriage might be the only way to civilize the Indians. While sexual contact with Native Americans continued in British North America, it was largely confined to the frontiers, away from the prying eyes and regulation of sexuality of English society on the seaboard. Men might even have Indian wives and families on the frontier, separate from their family and reputation in English-controlled territory.

The French had an almost totally different view, encouraging their colonists to marry native women to better connect colonial and indigenous society. This is one of the many, many reasons the French enjoyed closer alliances with Native Americans throughout the colonial period.

That's a complex question, as it hinges on the definition of attractive.

To be attractive, a potential mate has to offer a realistic chance of fulfilling the desires of the other. But this says nothing of what those desires might be! In modern parlance: marriage material is not judged by the same criteria as a centerfold, and this distinction is central to defining attractiveness in the new world colonies.

Let us now have a look at the settlers of New France in the XVII^th century (but have a look at the comment of /u/TRB1783 for a more Anglo-centric perpective). In the beginning, marriage with native girls was strongly encouraged. This was in part because of a shortage of marriageable girls of French extraction (the male to female ratio was initially about 10:1), but it was also in part a deliberate strategy of assimilation as well as an attempt to cement and reinforce alliances. Some effort was put into this, as witnessed notably by the correspondence of Intendant Duchesneau in 1681 asking the king to endow a fund to provide native girls in French schools with funds in view of marriage:

• "… a small fund to endow savage girls instructed by the Ursulines so as to marry them into christian families…»

Ultimately such efforts failed, not in view of any lack of physical attractiveness, but because of the difficulty of transmitting European and Christian values to the natives. This made such concepts as home ownership, domestic economy and marital fidelity at best tentative, if not downright fanciful, which is really not what one is looking for when choosing a spouse to establish a farmstead in the colonies. Consider to that effect the correspondence of mother Marie de l’Incarnation in 1668 (loosely translated):

• “It is however very difficult, if not impossible, to francize and civilize them. We have more such experience than any other, and have found that of a hundred which came through our care only one was civilized. They show obeisance and intelligence, but as soon as you look the other way they jump the fence and go back to the woods with their parents, where they find more pleasure than in the convenience of any French household. Thus is the savage disposition; they cannot be forced; if they are they become melancholic and melancholy makes them ill. Furthermore, the savages show extraordinary love for their children, and when they know them sad will go beyond any consideration to have them back, forcing us to give them back. We’ve had Hurons, Algonquins and Iroquois; the latter are prettier and more docile than the others. I do not know if we shall succeed in civilising them more than the others, or if they will retain the French courtesy with which they will have been brought up. I do not expect as much, because they are savages, and that is enough to keep expectations low”.

Furthermore, while it was notoriously difficult to culturally integrate natives in the French colony, the reverse was comparatively easy. As father Sagard said after his travels in 1624 (loosely translated):

• “Even the best raised Frenchmen, schooled in Faith, become Savages in as much as they live with the Savages”.

Thus, the policy of encouraging native women to marry the colonists was a quasi-complete and utter failure despite a severe shortage of women of marriageable age (at least in New France), not because of any lack in physical attractiveness so much as because of deeply ingrained cultural differences, which in the end led either Jean Talon or Frontenac (the records are a bit vague on which one) to petition the Crown for French women for the colonists. This resulted in the sending of the “Filles du Roi”, literally “Barges full of women” (to paraphrase the popular expression). These were orphan girls and wards of the state, specially selected in orphanages in view of their ability to live and work in farms in the colony, and endowed with a dowry by the king. Furthermore, the fact that physical attractiveness was not a factor is further exemplified by the custom amongst Coureur des Bois of taking summer wives amongst the natives. These summer wives were often treated as a second family and returned to on an annual basis as the Coureur des Bois would complete his fur run.

Related question, I have Native American ancestors on both sides of my family and I'm wondering if it was more socially acceptable for white people to mingle with Native Americans than it was with other races.