Hi @NerdyBoyCool, Welcome to the Auth0 Community!
It’s not possible to use localhost in Auth0 Actions/Rules/Hooks. Simply because, as you have mentioned, the localhost refers to the server instance the Actions/Rules/Hooks are running.
You have to use the exact location in the URL which is available over the public internet or use a tool like you have used (ngrok) to connect the request to the actual server.
Hope this answers your question!