When I flag a question I see options but I can't find the option that would close it as being too localized. Where is that option?
The closest current analogue to "too localized" is one of the new custom off topic reasons:
This question was caused by a problem that can no longer be reproduced or a simple typographical error. While similar questions may be on-topic here, this one was resolved in a manner unlikely to help future readers. This can often be avoided by identifying and closely inspecting the shortest program necessary to reproduce the problem before posting.
Please don't use this reason if the bolded items don't apply to the question. Per the quote in Ryan's answer, TL used to be used on code dump questions. Today, those should be flagged and closed as either "too broad" or "unclear what you're asking" as the situation warrants.
You may find the following questions informative regarding the close reasons changes:
What happened to the "You're Just Lazy" close vote reason?
How should "do my homework" questions be closed? (Missing "demonstrate minimal understanding")
Improving "demonstrate a minimal understanding" close reason
That option has been removed, as of Jun 12 '13 at 18:45. To quote from the announcement:
"Too Localized" is no longer necessary since the specific off-topic reasons now address its main use case. (new) Too Localized
was, by far, the most misused close reason in our surveys, with both Community Managers and Moderators deeming over 50% of randomly sampled TL closures to not have merited closure (including on SO).
Today, TL is used helpfully on code dump questions on SO, but the new OT reasons are where this is now correctly addressed. SO can use "Large blocks of code with requests for debugging without meaningful supporting info" as a specific OT reason.