Welcome to the forum Deamn! I don't actually know of any source for smaller flags, but checkout this link from the Graphics Fairy. She offers many tutorials and links for transferring images.

http://www.graphicsfairy-diy.com/2012/01/12-easy-image-transfer-methods-for-diy.html

You could print out smaller images to use as flags.

Good luck!

You could check out dollhouse furnishings. They have miniature replicas of nearly every household and garden item.

Found some flag plant stakes at DollarGeneral that are perfect. Got a ladybug, a dragonfly, a butterfly & a frog ones. Too cute.

I would think that it would not be too hard to make? I have some that were made by a group, they look like it was a linen that was acrylic paint on it.