Custom Work Item Types don't show in any Board or Backlog?

Question

We've created a new work item type called "Improvement", but found that it does not show in any board or backlog - only search. After some digging in settings, I found this:

Can you really not add new work item types and get them into your workflow along side the default types?

Answer 1

In this page, hover with the mouse on the work item level you want to include your custom item and click "Edit":

In the screen that opens you can add the custom work item.