If you have enabled the ‘Flagged email’ option from settings in To Do, then any email you flag in Outlook will show up under the ‘Flagged email’ smartlist.
From the Outlook web app, you can create a task out of an email by right-clicking —> Advanced actions —> Create task. You can also select a message in the body of an email and create a task out of it.
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Opening outlook email in the web app rather than the desktop app is a deal killer. Seamless integration with Outlook was the one opportunity for Microsoft to differentiate and rise above all the competing apps and they blew it.