The PowerScript Migrator product, which is included in both the PowerBuilder CloudPro and RapidSharp bundles, only converts PowerBuilder business logic to C#. However, the controllers and services you create do not necessarily have to be REST APIs.
As far as the application UI, we do not automatically convert that part of PowerBuilder to C#. This would be manual effort, but it generally is not the difficult task or majority of the effort. This is why we put our focus on the business logic conversion.
If you do want to go to C#, my recommendation would be to migrate to REST APIs even if you want to deploy on-premise client/server model. Nothing stipulates that REST APIs cannot be deployed on-premise, but then it makes your architecture flexible to deploy and interop anyway you please in the future. Also, keep in mind that if you do not rewrite your UI in .NET then would need to interface with your converted business logic through REST APIs anyway.