Site Notification plugin is a bundled plugin that comes with Elgg. No need to replace it with any other version. On the contrary, you might even get issues when using another version.

The error you get now is either caused by wrong file/folder permissions (i.e. the webserver can't read the files). Or you have restored the plugin files wrong (start.php should be mod/site_notifications/start.php and not at mod/site_notifications/site_notifications/start.php - and the same relative location with regards to start.php for all other files of the plugin).

The original reason the site notifications might have failed to be sent could be that you haven't set up the cronjobs Elgg needs (http://learn.elgg.org/en/stable/admin/cron.html). In this case the "minute" cron job, as site notifications are not sent immediately but on a 1 minute schedule.

it says it is ok but I have tried it at the top and bottom of the plugin list and it still gives the error

I deleted the friend request version 1.9 that came with elgg 2.3.2 and uploaded and installed friend request version 5 and it is now working. you can get it here:

https://elgg.org/plugins/384965

There is a search box in the sidebar. Asked and answered a thousand times

http://learn.elgg.org/en/stable/appendix/faqs.html#server-logs