Let's back up.
Fiddler's a proxy server; it sees all of the traffic that is sent to it. Generally speaking (unless you're using it as a Reverse Proxy) you never want to configure Fiddler to run on port 80; instead leave it up at port 8888 where it runs by default. You instead configure your client to proxy its traffic through Fiddler.
Now, what "reading around on the Internet" did you do that caused you to modify your machine.config or web.config file (you didn't mention which you edited)?
If your goal is to watch traffic with Fiddler, you need to point the ASP.NET proxy settings at Fiddler, not at whatever "PH.api" is (e.g. use "127.0.0.1:8888" and set bypassOnLocal to false). The further complexity arises in that System.NET bypasses the proxy for any request to "localhost" or "127.0.0.1", so if you're using those addresses for your target, you should change them to "localhost.fiddler" temporarily while debugging.