To erase the drive using APFS, you must select the actual container; otherwise, Disk Utility will only show volumes within the container (it will only show already partitioned drives, but all APFS-formatted drives are actually volumes within a top-level APFS container).
Also, note that Disk Utility will only offer to format using APFS if “Partition Map” is set to “GUID Partition Map” and not the “Master Boot Record”. If the partition map is set to MBR then APFS is not available.
So it’s one of the two reasons above why you are not being offered APFS as an option.