Does turning off the "Show notifications" settings for apps improve battery life?
Disabling a notification for particular app wont' save battery. Yes it would a little by not ringing and vibrating and also by not making you look at the phone.

Actually notification is handled by OS itself. An app just says that I want this notification to be displayed and OS handles it. In your case those apps are running in background using service and periodically asks the OS to display the notification. Event though you've disabled the notification the service is still running and still requesting the OS to display notification.