The setting you used isn't very important.
If you want to have a form edit a post, you need to pass that post's id to the form using one of two methods. Either add the post id to the url using the GET variable set up by this plugin "gform_post_id" or with the updated version of the plugin, you can pass the post id through a function instead.
Example 1, url for the current page:
Example 2, in your page template:
The code you added to functions.php will simply change
So after adding that to your functiions.php, you would use: