How do you make a parent child relationship between two inventory items

Through Matrix items

If I wanted to create a kit of items what would be the best way to do that?

There is a standard item type available as kit item when you are going to create a new item

This is what my screen looks like

I think you are missing some features that need to be enabled. Please check your enable features section

What are the modules you need to have

I guess you need to have advanced inventory module for this. Further you can contact with your Netsuite account manager for this.