Can the appliance monitor internal traffic that does not go to the Internet?

Yes. 

While most cyber threats will require access to the Internet to infect a network or accomplish the goals of the attacker, in some cases it can be important to monitor internal traffic. The appliance will accept several other data types from internal sources, including IPFix, Netflow (v5 and v9), sFlow, pFlow, syslog, and more. You can also set up multiple appliances on the same network. Contact support for more information.