WCF (hosting service in IIS) – machine name automattically being picked up by WCF rather than IP

It's because you don't have your host headers set. This seems to be an extremely common problem, I run into it all the time. There's no configuration for the uris that it generates, it looks up the right address by examining the host header of the site. Even if it's in a virtual directory, you need to go to the parent, in your case, default directory, and add a host header.

Let me know if you don't know how to do this.

As a workaround you could add a handler to the ServicePointManager's ServerCertificateValidationCallback on the client side:

System.Net.ServicePointManager.ServerCertificateValidationCallback +=
    (se, cert, chain, sslerror) =>
        {
            return true;
        };

but be aware that this is not a good practice as it completely ignores the server certificate and tells the service point manager that whatever certificate is fine which can seriously compromise client security. You could refine this and do some custom checking (for certificate name, hash etc). at least you can circumvent problems during development when using test certificates.