Which server is splunk-launch.conf found on?
It would be helpful to note on ALL questions regarding file locations, which functional node they're on.
This file is used on all Splunk instances, even universal forwarders, and is found in
$SPLUNK_HOME/etc on *nix or
$SPLUNK_HOME/etc on *win
What if you have a distributed environment? your indexes are not stored on the local filesystem. Do I need to have $SPLUNK_DB set on my searchhead?
Indexes are always stored on a local filesystem.
Even if that filesystem is mounted from elsewhere, Splunk treats it as local (Don't do this btw!)
Its the same as @MuS mentioned on UFs, HFs, SHs and even distributed indexers.