Language detection URL domain on localhost
It is better that you configure a subdomain or even a complete domain. For example, site1.localhost and site2.localhost and that you change your apache or web server to point to the Drupal root folder. Even you can change your OS hosts and link to fake domains, for example, site1.example.com and site2.example.com.

For multi-domain and multi-language I would recommend these modules which work like a charm:


Domain Access
Internationalization


You can add new sites and in each site have one or more different languages. These would solve all your problems as it works very well and it is pretty good in configuring content served from a single installation to several different domains and languages.