Where is my stylesheet located? I would like to make small css changes such as h1 and various font, background colors and divs etc. I am using Newsflash theme on Drupal 7 and I have searched and searched my folders thus: sites> all> themes> newsflash> css> local.css

I can probably override things here but I would prefer to go to the source stylesheet if it exists.  Does it exist?  If not, is local.css the right place to write my changes?
Go to /admin/config/development/performance

Uncheck Aggregate and compress css files



Now with your browser right click and inspect element, hover mouse over the .css file and it will tell you where it is at. 



If it's coming from a contrib module, you should add your css on your theme's CSS file (in your case being local.css), as when you update that contrib module, it will lose the changes.

As you can see in my screenshot, that is coming from my theme's homepage.css file. 

PS: After you're done, remember to turn back on (check-mark) Aggregate and compress css files in Performance.