Hello Doggo,
The four large characters positioned at each "corner" of the red disc are 武運長久 ("Everlasting military fortune", or, basically, "good luck"). The rest are the names of well-wishers who have signed the flag. There are a lot of people from the Okumura family on that flag, so maybe the intended recipient was someone from that family. Other families who feature prominently are the Yoshida family, the Ikuta family, the Tamaki family, the Kani family etc.. Kani seems to be a somewhat rare name, and is based mostly in Gifu prefecture. So one might assume the flag comes from somewhere in Gifu, but the other names are not necessarily linked directly with Gifu, so just take it as a possible avenue of inquiry. I can't find any specific person to whom the flag was dedicated, which is something of a disappointment. As it is, it is just a flag full of names. I presume it is from the war period, but there is nothing specific about it that would identify it as a wartime souvenir. So at this point I would say that yes it is likely a "good luck" flag from the war era, but we have no clue as to the recipient, the location, or a specific date.