How to make the File Attach option available?
On the edit page of the content type that contains the file field, there is a  closed pane labelled 'File Attach Setting'. Inside of that is a checkbox that reads 'File attach from server directory'. It needs to be checked.

Also note, regardless of where you've specified that the file be stored, the module will create a dir named file_attach. This confused me earlier. I thought it was looking only for files in the default directory ie
sites/default/files/file_attach