Not it's on the opposite side of the engine to the crank pulley, and I suggest you NOT mess with that component. Going to a lightened crank pulley requires you to remove the dampening characteristics of the stock pulley which can cause an engine failure (thewre are about 1000 threads on this - "underdrive pulles), if anything, UPGRADING to a Dual Mode Dampener would be my advice (and the advice of others) to you.
Getting back to the flywheel, it sits inside the transmission bell-housing and it bolted directly to the crank. It's job it to provide a large moment of inrtia to keep the engine turning over, because as you now, the combustion process is not a smooth one, and without a flywheel , the engine probably would not want to idle or run smoothly at all. Secondly, in cars with a manual transmission, the flywheel also acts as a power conduit to the transmission, in that the friction pads on the clutch "grip" the surface of the flywheel and thus complete the union between engine and transmission.
By reducing the weight of the flywheel, you can, to a certain extent, reduce the moment of inertia of the flywheel and thus make it "easier" for the engine to rotate the transmission input shafts, etc, etc, and thus utilise more power to move the vehicle rather than spin the flywheel. So in effect lightenenig the flywheel, redirects some of the power you were using to rotate it before, into moving the vehicle. So in effect it never MAKES power, it just uses less of it.
Does this help?
