drag flap or no, but have you ever tried to capture gs when clean?well what i mean is if your flaps are not 5/10 when you capture gs ,boy you will have to drop your gear in a hurry. i have flown the 737 23456789. not once have had a problem with flap speed been exceeded. if you select flap 10 and then have 3000 vs then you will have a problem. but if you are in lvl chg mode or if flying manually a rod of upto 1500 would never get you in trouble.on the 200s we used a rod of 1000 to start reducing our speed and to get into slot for flap extension.you got to be abit ahead in your planning.
as far as being level for flap extension,it is not possible all the time, yes when you can then why not.
cheers and happy landing
ps. the last 73 fctm which i have doesnt call for level flight for flap extension.