Heavily staked means 'large steem power holders'. Steem power (SP) is 'stake' (claim) on the pool. So, those who hold a lot of stake have more influence on how the pool is distributed. It also means they are heavily invested.

but in my opinion, flag actually serve the purpose of protecting this community from those who do not appreciate other original content.

Yes, this is the case and what the flag is meant for. The people using it as an attack on a person don't use it well in my opinion.