Basically what it´s saying is right. You are tring to use LOCAL storage as the quorum disk. This is not possible, the whole idea of the cluster is that if one machine goes down, the other can take the resources and continue. If box A goes down, local storage goes down too.
You HAVE to use shared storage, iSCSI / SAN. You can emulate it with tools like starwinds, freenas, openfiler or use a SAN at your place.
Let me know if you have further questions.