From my reply to a discussion from r/fujifilm on Reddit.

I shoot both film and digital, and digital grain is certainly not the same thing as film grain. But that’s arguably the biggest mistake that people make: they aren’t meant to be the same. Consider that in film grain is unescapable: it is a byproduct of the film exposure and development process, inseparable from the taking of the photograph. There is no such thing as digital grain except as an effect applied in post. The way that film and digital grain are similar is that they both provide texture, albeit in different ways.

Texture is important to photography, because without it an image enters the uncanny valley of too-perfect realism. We see this especially in modern digital photographs using the best optics to create razor-sharp images with super high levels of fidelity. These images look “too real,” and that’s at odds with the fact that we know a photograph is not “the real thing.” It creates an unresolvable tension when viewing such images. Grain (both film and digital) gives us that by reducing the precision of the image. In this way the image aligns more with our own imperfect views of the world.

The other thing to keep in mind when thinking about grain is that it is like salt in food: you shouldn’t be able to tell that it’s there. If you can, then it’s too much. Now obviously some photographers lean into grain for artistic effect. For most images taken digitally, however, we want a little bit of grain to take away that aforementioned tension. How much is too much? It’s a subjective call. Some people like really salty food, and some people like really grainy images. I personally say that if you can perceive the grain when looking at the full image, it’s too much. If you’re pixel peeping (or magnifying) then of course the grain will be apparent. You’re too close! But if upon stepping back the grain disappears into the image, then that’s probably about right. Again, it’s a personal call and there’s no right or wrong answer.

I generally shoot raw with my Fuji cameras, so I don’t usually use grain. If the image needs any texturing, I apply it when editing later. When I do shoot jpg, however, I think at the weak setting, it usually gives just enough tonal variability to texture the image appropriately and get rid of the clinical “digitalness” of the image. YMMV.