Interesting idea, but like Thomas brought up, we have to pick if we want more realism or better gameplay. Making one of these flags visible at a distance would be tough if it's not super huge. However if it's super huge, that makes it far less difficult for an enemy to spot you and figure out what you're doing. Plus, in relation to your realism with players talking between ships, there's always radios. Albeit somewhat primitive, radios were still present in the time period.