I was able to get this all to work on VS 2017 and win10:
Follow using 16 hive for SP2016.
https://weblogs.asp.net/ricardoperes/sharepoint-pitfalls-creating-a-visual-studio-project-without-sharepoint-locally-installed
Update registry with all settings HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Shared Tools\Web Server Extensions\16.0 settings from the SharePoint Server.
Saw different problem with SP project not loading with "Update Required" error.
Update MinimumOfficeToolsVersion from 14.6 to 14.0 in the project files.