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Beginner to this emulator. I just downloaded PCSX2, and want to play an iso file game. I looked at tutorials and it said I need to change the CDVD to a certain iso version. However, it only gives one option. When I press "Configure", there is no option when I click on source drive. The screenshot is attached. How do I get it to where I can play iso files?

It's already configured to run that, you shouldn't need to touch anything on that screen as that is for plugins.

Just select "ISO" from the CDVD menu, then use the Browse part of the same menu to select your ISO. The plugin is only for reading discs.