I cant seem to find that option... Even bought most of the resting bonus upgrades but I cant rest.

You have to have bought Brighthollow, and you go into the, house like structure, to the left of the main keep, and go up to the second floor and there is a bed in center left position to click on.

I like the mental image of the protagonist standing around in the courtyard, desperately trying to figure out how to sleep, getting more and more frustrated and furious as they can't figure out why it's not working, while the rest of the party slowly backs away.

I find it very laborious to first enter the house and then to walk up the second floor. To me there could be just a buttom for resting in the stronghold options menu.