An option to create new Dynamic Web Application is missing/ not available in any version of the Eclipse. Follow the below steps to fix the problem:
How to make eclipse recognize the correct file extension/open the correct editor for files opened outside of the scope of a project?
Right click and Open with … should the opening behavior in eclipse. Furthermore you can set the behavior in Preferences >> General >> Editors >> File Associations.
Eclipse Error: Dynamic Web Module 3.0 requires Java 1.6 or newer error while creating new project
There are couple of Solutions to fix this error I found below solution easy and effective. After adding Project name just change Web Module to 2.5