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At present, the hint "Create local variable" generally creates the variable at the very beginning of the method, instead of at the block start. There are times when the variable is declared on the same line as the hint however, and I haven't worked out when this is done. Local variables should be declared as close as possible to where they're being used, that is in the lowest block that encompasses all uses of the variable. At least this should be configurable.
I agree, and to be more precise, the variable should not be added at the start of the block, but at the latest possible position within the relevant block. For example in void foo() { // ... some code not using 'temp'... for (x : list) { // ... more code not using 'temp'... // (*) do { // ... more code ... if (temp > 0) { // ... even more code ... temp = temp - delta; } } while (temp >= 0); // ... more code possibly using 'temp'... } // ... more code not using 'temp'... } the variable declaration should be created at (*).