Can you provide some syntax on how to do the --host command? Not sure how to do the api and port part.
README.md has an example using the --host and --port commands. If you're running this locally though, you probably don't need to specify a host and port. My guess is that you haven't enabled the API in your miner properly. The readme has details on this as well under "API access".
Does this need to run from inside the sgminer folder?
Nope. It communicates with the miner via IP.
Does it work with sph-sgminer?
I don't know. I have never tried sph-sgminer. I can't imagine there are any changes in the API though, so I think it should. Perhaps you can try and get back with the results?
How do you use it with an X11 coin?
Another thing I haven't tried. I think it should just be a matter of running it against the miner. It doesn't really care what algorithm the miner is running as long as it reports back the hashrate.
Just putting it on my c: drive and using a .bat file with your sample config and it just crashes. Using sph-sgminer.
Try running it from a command prompt so you get to see any error message that might appear.