Literally, you can see it as "You are missing to me", with "missing" as in "The fork is missing".

"Mir fehlt eine Gabel" would be like "A fork is missing/lacking for me"; plural: "Mir fehlen Gabeln". I'd say the context you'd use this phrasing for is along the lines of "I lack [a thing]" or "I am [a thing] short", or simply "I don't have [a thing]", where "a thing" could be a fork on the table that ought to be there, money to buy this product with, the talent/qualification to do this, 5 XPs to reach the next Duolingo level.

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You can also say "Ich vermisse dich" instead, where the grammar is equivalent to the English "I miss you", with "you" as the direct object, and a German accusative.

"Ich vermisse eine Gabel" works as well, but it sounds quite formal, possibly a bit stuck-up and implying a criticising tone, like, "Somebody should have put a fork next to my plate".

You can't use it to say "I don't have [the money, the talent, ...]"; "vermissen" is instead used for lost things you long for (just like "mir fehlt/fehlen ..."), e.g. missing the good old times, the cakes of that certain café during your last holiday, a person who's not here anymore.

It's also used for animals that have gone missing: "Ich vermisse meine Katze, haben Sie sie gesehen?" This doesn't per se have the emotional connotation of "pining for the lost cat", only "I've lost my cat".

No, it's not "You failed me".

I think there's no easy equivalent to "to fail somebody" in German (unless I'm forgetting something). It can be "jemanden im Stich lassen", which generally means "to desert somebody in a time of need"; or you could go with "jemanden enttäuschen" = "to disappoint somebody", which is what I'd expect a villain to say to his minion.

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I think they want you to use some sort of colloquialism to translate "total", in order to reflect the tone; "I miss you very much" would simply be "Ich vermisse dich sehr".