Thanks a lot, The Avatar.
And to answer your questions:
Spoiler:OPEN+NOW=MAGIC.
Replace each letter with a number in a way so that OPEN+NOW becomes MAGIC. It's a math puzzle. I remembered doing that kind of thing in school, and liking it, but since it's not exactly obvious (and some people hate math) the workaround was added.
Any reason for the flag?
As the game came out, not really. There's nothing you can do with it, and pretty much it's only there so that there's a reason for the spade to be there. I made the game one third at the time and when I placed the flag there I wanted to make use for it in the final section, but never found a good use for it later.