DNS forwarding with local hostnames?

[dwasifar]

Currently on my network I have a dedicated DNS/DHCP server running dnsmasq on Debian.  It has three reasons to exist:

1) DHCP IP assignments.  Most devices on the network are configured with DHCP reservations by MAC address.
2) DNS relay services.
3) Hostnames by IP, so I can connect to other devices by their local hostnames instead of IP.

The first two things are configured in dnsmasq.conf, whereas the third thing is done in /etc/hosts.

I feel like OPNsense could take over these functions, given that dnsmasq is already included.  I'm pretty sure I could figure out how to make the first two things happen (though I would not refuse any pointers).  But is there a way to configure it to respond to a DNS request for a local hostname with that machine's IP on the local subnet?  Would that be Host Overrides in dnsmasq settings under Advanced?