There is no way to output a format the includes a menu from Premiere Elements that includes a menu other than a DVD, a BluRay disc or a WebDVD.
This isn't a limitation of Premiere Elements. The nature of a video menu system requires a number of interlinked image and video files, so you can't create a single media file that includes an interactive menu.
For output settings, I would try to match the original file. Share > Computer > AVCHD > then pick an MP4 setting that matches. There is an option to change the frame rate under the "Advanced" button if you want to match 60p.
The WD TV I have won't do DVD style menus. However, in it's own menu system, it will show clip titles. And, all the clips in a folder will play in sequence.
So make a folder with the primary name of the video and put the full video in that folder for when you want to watch it uninterupted. Then in another folder you could have a copy of the same video cut into clips where you would have had DVD menu markers. Title the clips individually so the chapters display well. Then use the WD TV remote to pick the "chapters". You can make these separate clips without too much trouble by using the Work Area Bars and checking the Share WorkArea Bar Only box.
Depending on the version of WD TV you have, the folder with the clip cuts may play smoothly enough that you don't need the original in one piece. The idea is that when you play the folder all the parts in the folder play in sequence. It may transition through the clips without any pause or there may be a pause that would be disruptive.
One more thing. One mine, the display order and play order are the same. I have to make the order work with numbering our lettering. For example, the first clip is "01 clip title" and the second, "02 clip title", etc.