Also I'm a little confused on the hostility here?
I'm not being hostile at all. If you're reading this as hostile, I apologize. That isn't my intent and I wanted to address that first. But let me try to explain.
are you suggesting this line is a red herring and the game actually thinks its not important?
No, the dialgoue is important. The NICKNAME is not. We've established with hard evidence, the script of the game itself, that he uses the name for 2 other people (Kris and Susie) and primarily uses it for Susie. It is not a nickname for Ralsei.
Again, look at the guideline.

It must be a name the character is known by (Ralsei is not "known by" Princess). The alias must be noteworth (ie: unique, special, and reflective of the character. It is not this as Flowery uses it for other characters and it is not used to refer to Ralsei specifically, like Raly is) and not one-off gags.
This is why Raly is a valid nickname but "princess" is not. Flowery uses "princesses" to refer to the fun gang in general.
I don't see why you're so passionate about the specific phrasing when I feel it's pretty concrete.
This will come across hostile but it isn't. It doesn't matter that you personally feel. It doesn't matter what I personally feel. The rules are guidelines and they are objective for a reason. That's why we write objective guidelines, because if we moderated just based purely on opinions, there would be no consistency across the wiki and it would just be a mess of theories and speculation.
The implication is that you believe I'm twisting the text so that it can fit my view
You are, because you've said the game directly says things are important. It does not. At no point in time does the game go "HEY, THIS IS IMPORTANT." That isn't how the game works.
I think the game saying something seems important is saying that it is important.
Again, that is your opinion and interpretation of the scene, but regardless of how you feel about it, it still fails to meet the requirements the wiki holds.
Princess is not a nickname for Ralsei. It can be argued to be a nickname for Susie. Raly is Flowery's nickname for Ralsei and he uses it consistently for Ralsei, and only for Ralsei.
referenced in multiple penultimate scenes of the character's finale?
It isn't. Again, Flowery literally only calls Ralsei princess once. He could have said "Got it, kiddo?" or "Got it, dude?" and the scene would have been exactly the same. Neither of those are nicknames either, and wouldn't apply had he said them. Now if he had said "Got it, Fuzzball?" that would have been a nickname because he only used it for Ralsei, and it clearly applies only to him and references a trait of his.
His final scene he calls Susie princess.