How to use Local Variables and Sub Macros?

The wiki talks about Local Variables, which are Restricted to the specific Macro it is in.

Does this mean that it won't appear in the list of variables?

It says that Name must begin with “local” (case insensitive). So would this be correct: local_correct_list?
I tried that, but it still appears in the list of variables?

Also, that wiki page mentions "sub-macros". I've searched "sub-macros" on the Wiki but can't find a page that defines them. How do they work?