Installing in a localhost environment is the same as installing in any other location, as long as the server is set up correctly. Both are simply webservers. If you are having issues with 404s when clicking in other locations it very much sounds like the htaccess you have set up when in that location is incorrect, so it would be worth checking that. Of course, being in localhost, there is very limited advice we are able to give as we cant see the box ourselves.
It would be worth asking yourself the question as to why this is a deal breaker for yourself. What is in you are using these for? There are direct links to posts, as there are in any other platform. It may well simply be that you are not seeing what you are looking for. Its worth bearing mind mind there will be differences when you change platform. So if you let us know what the use case is, we can point out how you would go about what you are trying to do.
This of course would be your own perspective, of course. It does however need to be pointed out that post number 5 (for example) for you, may not be post number 5 for someone else, as it depends on what that person can see. For example, there may be 2 hidden posts between that others cant see that you can. This is why it would be worth knowing your own use case, then we can advise accordingly.