Step 1 - Goto CUSTOM GAME
Step 2 - select CREATE at the top
Step 3 - Select your mode and maps
Step 4 - You will now be at the Player Slot Selection screen.
If you dont want randos joining, switch the lock at the top of the screen. the number shouldnt matter unless you want specific online friends to join
Right Trigger on any controller to add a local Co-op player. There's no keyboard co-op for obvious reasons.
click on blank spaces to add AI, and then re-click that AI to modify their difficulty

THE END. The devs should've just added an offline co-op mode to the main menu, but I guess that's too much work. They focused more on the micro transactions for a kids game.