That checkbox in Preferences is irrelevant to Home Sharing; it only control 
sharing of music to other Macs/Windows/DAAP clients, i.e. iTunes running on a 
computer (but not iOS) or an iOS DAAP app.  The control you want is in File, 
Home Sharing as you know.

Put music on your iOS device, eh?  Of course, because you’d never want to use 
Home Sharing without first syncing or using iCloud Library.  Apple can be 
amazingly obtuse sometimes.  If that’s what it takes, it’s absolutely 
ridiculous.

Now that you know, you could consider doing what Apple wants, syncing something 
over or signing up for iTunes Match (resistance is futile, for me).  You’d get 
a little benefit from having a cloud of your music, or something local.  
Anyway, I’m glad you’ve found the solution.

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