The most secure and scalable approach for this scenario involves two key steps. First, establish the most restrictive baseline security model by setting the External Organization-Wide Defaults (OWD) to 'Private' for all relevant objects (Case, Account, Grant Application). This ensures that, by default, external users cannot see any records they do not own. Second, use Sharing Sets to grant users access to specific records they need. Sharing Sets are designed for high-volume Experience Cloud sites to grant users access to records that are associated with their account or contact, which directly addresses the need for users to see their own cases and applications.

A. Set up Sharing Rules to grant authenticated users access to their Cases. Applications, and Accounts: Sharing Rules are not the optimal tool for this use case. They are designed to open up access based on record ownership or criteria, not a user's direct relationship to an account, and are less performant than Sharing Sets for large-scale external user access.

B. Set Org-Wide Defaults for External Users to Hidden for everything: "Hidden" is not a valid Organization-Wide Default setting in Salesforce. The most restrictive and appropriate setting is "Private."

1. Salesforce Help, "External Organization-Wide Defaults": "To secure your org, we recommend setting the default internal and external access to the most restrictive level—Private. You can then use other record-level security and sharing tools to grant access to users who need it." This supports setting the OWD to Private (Option D) as the foundational step.

2. Salesforce Help, "Control Access to Records Using Sharing Sets": "Sharing sets grant site users access to records that are associated with their accounts or contacts based on their user profiles... A sharing set grants access to any record associated with an account or contact that matches the user's account or contact." This directly supports using Sharing Sets (Option C) to provide the required record access.

3. Salesforce Architects, "Record-Level Security for External Users": This guide outlines the external sharing model, stating, "The external sharing model determines the baseline record access for external users... After you’ve set the org-wide defaults, you can use other record-level security features to grant access to external users. For partner and customer users, you can use sharing sets..." This confirms the two-step process of setting OWD to Private and then using Sharing Sets.

4. Public Sector Solutions Developer Guide, "Set Up Security and Sharing": While discussing the overall security model, the guide emphasizes leveraging the core platform's security features. It states, "Configure organization-wide sharing defaults to restrict access to records... For external users, such as constituents who log in to an Experience Cloud site, set the default external access to Private for all objects." This reinforces the use of Private External OWDs as a best practice within Public Sector Solutions.