Yes, you would place it within your theme’s functions.php file typically – assuming that the “1” at the start of the line in your message, and the double quotes at the end are errant, as they shouldn’t be included.
That said, I’m not a Jetpack user, so can’t speak to what you’re trying to ultimately make work here. The one thing that I can say is that Jetpack’s servers will absolutely not be able to connect to a locally hosted site – a public server simply can’t find or reach a host named woolylux.local. Your site will be able to initiate connections to a public server (e.g. the Jetpack servers), but not the other way.
Perhaps if you outline what you’re trying to have work with Jetpack that isn’t currently, someone else with Jetpack experience might be able to chime in to help.