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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I would like the option to have a linked email open in the Outlook desktop application when I'm on my computer, rather than opening in the web app. It doesn't appear to be a setting I can control, and when I'm on my computer, I only use the desktop app.