We call them "hard problems" because they are difficult. Expect Flash sometime after cut-n-paste.
Flash would be nice, but low on the list of priorities IMO.
App Store will suffer if Flash do come to iPhone. There is no reason for people to pay for any of those classic games like Pac Man when they are openly available on the internet. Web App will grow but App Store will definitely slow down or suffer, especially $0.99 apps. I doubt if Apple would allow that to happen.
Flash would be nice, but low on the list of priorities IMO.