You're using the VPN tab in the GUI, and not the Config Tree right?
peer = remote router's WAN IP
local ip = local router's WAN IP
You do not need to do anything in the firewall or mess around in the config tree if you have that box checked.
This will work for sure to connect two edgerouters. Are you connecting to a Cisco router? I'm not sure what settings it uses but you may need to tweak things in the config tree for that.
If it still does not working, can you open the CLI and type
show vpn ipsec sa
and show us what result you get if anything?