In your case, I think you want local authentication (i.e. users are configured on the EdgeRouter device). RADIUS is if you have a remote RADIUS authentication server, and you're setting up the users on that.
You won't be using the VPN tab in the GUI, as that is for site-to-site VPNs - all the configuration you have to do will be via the CLI (either by SSH-ing to your EdgeRouter, or via the CLI functionality in the GUI).
I should also mention that the official Ubiquiti docs actually seem to be out of date - I just raised a thread about it here:
Hopefully we'll hear back from the Ubiquti team about updates.
