When configuring the ssh_options[:keys] options. It says it should have a value of path/to/ssh/id_rsa. Is that on my local machine or on the host machine?
id_rsa is your private key and should stay on your local machine; keep it secret; it will take the place of your password when logging in to the server. If you're worried it may be accessed by other people then encrypt it with a passphrase. id_rsa.pub is the public key and you can push that up to your server and (usually) stick it in ~/.ssh/authorized_keys. (see ssh-copy-id) ssh_options needs to know the private key so that it can authenticate you with your server (once you've pushed up your public key).