Try subdiving the flag mesh more.
And yes, water shader is meant to react with wind... try a different Type =
(LAKE, POND, POOL, SEA, OCEAN)
[Material_Water]
Materials = rio
; Meshes = agua ; also working as usual
WaterForceBlending=material: rio
Type =POOL ; Available values: LAKE, POND, POOL, SEA, OCEAN
; optional (defaults after "="):
UseNormalMapTwice = 0 ; use txNormal as secondary normal map
UseAlphaFromDiffuse = 0 ; use alpha-channel from txDiffuse for blending
UseAlphaFromNormal = 0 ; use alpha-channel from txNormal for blending
UseRecommendedTextures = 1 ; use recommended textures for water normals
UseRecommendedDetailTexture = 0 ; same, but only for secondary normals texture
UnevenWaterFix = 1 ; increase for uneven water meshes. messes up distant reflections
; a bit, but reduces dark self-reflecting artifacts
[Material_WaterDrain]
Materials =rio
Type = POOL ; Available values: LAKE, POND, POOL, SEA, OCEAN
[BOUNCED_LIGHT] CAUSTICS = 1
The only flaw I see is the color, but it looks more real since I see the bottom of the river
For the flag I subdivided it quite a bit, but the problem is that one side is visible to the other, I don't know how to give it a double side in ex_confi