to record the mac's internal sound with quicktime you need additional software. i use the free BlackHole Virtual Audio Driver. then you can choose "BlackHole 2ch" in the recording options instead of "Built-in Microphone."
you will also need to set up a multi-output device in your audio MIDI setup utility to be able to both hear and record the internal audio at the same time.
to set up a multi-output device:
Open Audio MIDI Setup: (found in /Applications/Utilities)
hit the '+' button in the bottom left corner and select "Create Multi Output Device"
then in the panel that appears on the right, in the Multi-Output Device tab, select "Built-in Output" AND "BlackHole 2ch". (and, if you want, any of your other connected devices.)
once you do that, (and BEFORE recording) you can choose "BlackHole 2ch" or "Multi-Output Device" in your menubar "sound options".
to both hear the speakers and record the audio at the same time, choose "Multi-Output Device". before choosing multi-out, set the internal speakers' volume to a comfortable level first. you cannot control the volume once you are in multi-out mode.
but as far as seeing soundflower in your recording options, it's the software i used to use before transitioning to BlackHole. but unlike BlackHole, soundflower was a kext extension. i don't believe that it works with macOS anymore. you should check in your Audio MIDI options and see if it's still installed. if it still works, it operates much the same way as BlackHole.
if you can't get soundflower working, you can uninstall it with these steps:
From the Finder, press "Shift-Cmd-G" and in the popup window, type in:
/Library/Extensions
Then inside that folder, look for a "Soundflower.kext" file. If there is one, DRAG it into the trash (you may be asked for the admin password)
REPEAT THE ABOVE STEPS, typing in this folder path:
/System/Library/Extensions
Then, empty your trash and restart your mac.
