And both are important to keep in mind, although if you put enough work into it, you can work around those issues.
However, I think there's a much more important matter here. What's your experience with Flash? A newbie at flash is not going to make an impressive flash site their first try. And unfortunately, people have come to have high standards for any flash sites.
You can pull off an equally impressive and "modern" website without the use of flash at all, using a bit of extra javascript and AJAX.
His second point is 100% applicable with the average PC user. Having done usability tests before, it's almost infuriating to watch a person just stare at the screen, completely lost. But it happens, a LOT.