In this application, nodejs pods are running inside kubernetes, and mongodb itself sitting outside at host as localhost.
This indeed not good design, but its only for dev environment. In production a separte mongodb server will be there, as such option to have a non loopback ip in endpoint, so will not be a problem in Production.
Have considered following options for dev environment
Use localhost connect string to connect to mongodb, but it will refer to pod's own localhost not host's localhost
Use headless service and provide localhost ip and port in endpoint. However endpoint doesn't allow loopback
Suggest if there is a way to access mongodb database at host's localhost from inside cluster (pod / nodejs application).