A pet peeve is flying the American Flag from the starboard spreader, antenna or fishing outrigger. This is the proper place to fly the flag of a foreign country when you are visiting.
The standard for many years of flag etiquette is Chapmans' Piloting and Seamanship--which should be on the book shelf of every boater. I have 3 versions--one from the late 50's well worn, one from the mid 70's and a new one 2009--I suspect that there is a newer version.
The 2009 version is very clear: On a Mastless motorboat, the US ensign (50 star American flag) is flown from a stern staff, and the Club burgee is flow from a bow staff. It does mention signal masts (which the C Dory does not have) and sport fishers--where the flag is flown aft the tuna tower, to keep the cockpit coaming clear for fishing lines. I suppose that if one was fishing out of a C Dory, a staff on the aft cabin house might be appropriate.--If the Radar Arch was on the cabin house, and the staff attached to that--again it could be appropriate when the boat is fishing.
In fact there are many traditions of the sea. It is wise to observe them and pass them down.
There is another confusion--that is the Yacht Ensign. Yacht ensign which has a fouled anchor in a circle of 13 stars in the field, was created by Act of Congress in August, 1848 as a flag to be used by licensed U.S. yachts. This was apparently not intended to be an ensign, but rather was intended to be used as a signal flag by a licensed yacht to declare herself exempt from customs duties, and its usage was required by licensed yachts. Due to its similarity to the national ensign, however, both licensed and unlicensed yachts started using this as the ensign, and eventually the US government confirmed that it would accept this practice for yachts in United States waters; but the national flag is the only ensign allowable in international or foreign waters. Some states have recognized the yacht Ensign--but I strongly prefer the National Ensign--or 50 star American Flag.