South Africa shows fine. A user here is from South Africa and I can see his flag without a problem.
Sorry, no. That's a server level problem.
I use apache here in it's default configuration with no problems.
Before I make any changes I want to see how XenForo itself will deal with privacy options. Once they've made their changes, I'll be in a better position to add to their changes (I'm guessing they will add opt-in options at registration) at the same time.