I didn't even know Wakeboarding Mag could spell wakesurfing!
Is that the CWB promo vid? WakeB - to answer your questions directly, here in CA. You only need to hold the flag up when the rider and or rope is in the water, but NOT when the rider is up and riding. I think that starting like a wakeboard or wakeskate is the easiest, but there are folks that start from a prone position. Howtowakeesurf.com is a good place to look, as is the free vid from Inland Surfer. I sold a ton of old used wakesurfers before this season for that price, but It would be hard to find onee now. That 5'6" isn't a bad option for starting out, especially at that price.