Developing Sharepoint apps and web parts with Visual Studio

I'm a SharePoint farm admin with a small production farm, and also two single-server Test/Dev farms, all running SharePoint 2016.

I have Visual Studio 2017, and want to develop some simple custom web parts / apps. Visual Studio is installed on my workstation, and when I try to create a new project, I get the message 'The required version of SharePoint is not installed on this system.'

Does VS have to be installed on the Web front-end server? Can it not connect from a remote location, if the user account has admin privileges on the farms?

Thank you,

Keith Vollero