Thank you for that tip. It seems to have something to do with my license (although I don't know what the solution is yet). My application is built for x86, and I am running a 64 bit Windows 10. The log from LocalServerUtility looks like this:
2017-02-24 08:16:37,786 INFO rid= '' Server - Message : Log file path : "C:\Users\jsc.DGHOST\AppData\Local\Temp\ArcGISRuntimeLogs/arcgisruntime_16852.log"
2017-02-24 08:16:37,792 INFO rid= '' Server - Message : DataDir : "C:\Users\jsc.DGHOST\AppData\Local\Temp\arcgisruntime_16852"
2017-02-24 08:16:37,795 INFO rid= '' Server - Message : AppDataLocalDir : "C:\Users\JSC~1.DGH\AppData\Local\Temp\Local"
2017-02-24 08:16:37,796 INFO rid= '' Server - Message : AppDataRoamingDir : "C:\Users\JSC~1.DGH\AppData\Local\Temp\Roaming"
2017-02-24 08:16:37,797 INFO rid= '' Server - Message : AppDataCommonDir : "C:\Users\JSC~1.DGH\AppData\Local\Temp\Common"
2017-02-24 08:16:37,798 INFO rid= '' Server - Message : MyDocumentsDir : "C:\Users\JSC~1.DGH\AppData\Local\Temp\Documents"
2017-02-24 08:16:37,798 INFO rid= '' Server - Message : CrashDumpPath : "C:\Users\jsc.DGHOST\AppData\Local\Temp\ArcGISRuntimeErrorReports"
2017-02-24 08:16:37,799 INFO rid= '' Server - Message : Message : Attempt to use functionality that is not supported for the current license level