Regarding the usefullness of this setup, I can give a good example from my previous setup. It had a similar design, with a panel meter showing the flow and the buzzer alarm triggered by the flow meter's trip-point. The computer has been running fine for a while, until one night I heard the buzzer alarm going off (woke me up, that's how loud it was). I ran up to the computer, checked the pump (D4), and didn't feel it vibrate, nor was there any visible flow in the reservoir. Turned out that the pump's molex became loose for some reason and obviously cut off the power to it. So, that night I was glad that I got a very early warning. I can already hear the critics say that the BIOS option for the CPU temperature would have shut down the system, and I had and always will have this option enabled, but it would have taken some time for the temperature to rise to the preset value, and who knows what effect the hot water in the loop would have.

I am not sure how restrictive this flow meter is, it has a free-rotating nylon paddle wheel inside on a stainless steel shaft. I can set it spinning just by mildly exhaling air into the flow meter, so it doesn't seem like it would affect the flow the same way as a CPU waterblock.