Ah ok, I should have included more screenshots....
Mine:
which matches the example in the faq:
So in theory the dnsmasq should take care of the advertisement and the local DNS flag should mean that it is not taking care of the local DNS but acting only as upstream?
The FAQ didn't include what they have for their DHCP settings so I am not fully sure how it would be setup....but if they are saying that the upstream dns for pihole should be the router then the router needs an upstream if it needs to resolve something that is not already known and cached....so the upstream needs to be defined somewhere....right?
This is my DHCP setting that I think you were referencing before: