Having said that, here's my guess at a good setup:
Local - meaning this iAP-VC is the server
L2 - meaning that the gateway is some other deivce (not the iAP)
Excluded address - this one was odd to me, but think of it as a flag. The DHCP server will exclude the smaller set of IP addresses left or right of the flag on the IP-address number line. In this case .1-.5 wil lbe excluded.