I created a research subject for the Koll II model that Zer0 made for me. Once researched, it grants the Koll II a 5th ability which I named: "Reinforced Armor". That gives the ship an additional 2 Armor Points, and an additional 200 Hull Points.
I could create a new Research Subject that would give extra power to a Capital Ship, but that still leaves several problems. The Capital Ship type, (Battleship, Siege, etc.) would have to be pre-named. Meaning that the player would not be able to choose what type of Capital Ship that they wanted to apply it to. Secondly, it wouldn't be limited to just one Capital Ship, it would effect all the Capital Ships of that given type. And once again it would only say "Flagship" if that one was your highest level ship.
I've still had absolutely zero success in locating anything that governs the naming of a Capital Ship as The Flagship. We all know that it has to do with whichever ship is currently the highest level ship. So the Gameplay Constants file seemed like logical place for that to be in, but I have yet to find any reference in any file relating to "Flagship".