Let me paraphrase just to make sure we're on the same page.
You get alerts from email source (Nagios system) and you would like messages that contain 'Host Up for' won't appear in AC OR cancel out (acknowledge, close) corresponding, previously sent alert. Right?
If yes, then find explanation for every option below
1) I would like message that contain 'Host Up for' don't appear in AC
For this you should set up your email source properly on 'Route to Group' step.
2) I would like Up alert to cancel out the previous DOWN message
Currently there's no such functionality on AC side. Alerts could be processed only by human being (except for group escalation policy)
Please let me know, whether it has answered your questions.
Thanks, I'll look into this method.