I can flag posts by @Dan, who although is a mod, he’s the same trust level (4). I’d guess you could flag this post by me if you wanted to. But I would hazard a guess that it would even come back to me to review my own post - not sure?
Flags received/given are recorded and do affect the levels in some shape or form. You need to have below a certain number of flags received to be moved up the next level automatically.
Discourse has quite a good blog post on this which is worth looking at - Understanding Discourse Trust Levels
It’s worth noting that we can change the limits though, but to date, the only one we’ve changed relates to the number of new posts and likes in a day