Kiwi,
The 172 was certified to wording like this:
Directional stability and control.
(a) There may be no uncontrollable ground or water looping tendency in 90 degree cross winds, up to a wind velocity of 0.2 VS0, at any speed at which the airplane may be expected to be operated on the ground or water.
(b) A landplane must be satisfactorily controllable, without exceptional piloting skill or alertness, in power-off landings at normal landing speed, without using brakes or engine power to maintain a straight path.
(c) The airplane must have adequate directional control during taxiing.
You'll notice first of all that there is no reference there to flap position. Therefore the technique required to achieve this requirement can be specified, and commonly manufacturers seem to suggest lesser flap settings for crosswinds, but with no numbers attached to the recommendation. However, unless the Flight Manual makes a reference to "avoid", "not approved", "prohibited", "maximum" etc. with respect to flap use, it's pretty well up to your preference.
I have previously posted here that my personal preference in every aircraft other than a Twin Otter, is full flaps for every landing, unless you've had a flap system failure. My personal preference may not be right for everyone, and that's fine. Though, if it were my plane, a pilot who could not demonstrate a full flap landing in the "demonstrated" crosswind value for the plane, would not be taking it solo.
When I flight test a plane with an external modification (often tail booms), I am specifically looking for a weathervaning affect that the mod might have on the crosswind capability. I will fly in the maximum appropriate crosswind I can manage, and always use the maximum recommended flap setting. I have never had a problem. I do agree that taildraggers are more challenging in this regard, and I do shy away from high crosswinds when flying taildraggers.
The most extreme tests I have done like this were in two different Cessna Grand Caravans, one in a direct crosswind of 19 gusting 25 knots, the other in 35 gusting to 40 knots, 45 degrees off the runway heading. Both mods introduced more tail aft of the C of G, so more weathervaning was likely. Though I did have to apply and hold full rudder a few times to keep straight, there was no problem maintaining control in either test.
Interestingly, the Caravan flight testing required me to also demonstrate zero flap landings (wind not a factor) last week. The touchdown speed was about 30 knots higher (full flare not possible, 'cause of mod), and a bit alarming, compared to full flap landings.
I encourage you to just keep practicing crosswind landings, and keep using the greatest flap settings you can feel comfortable with. You'll find that your confidence grows faster than you'd expect. You'll only get better if you push yourself a bit. Know that the aircraft can do it, when you apply the skill. A 172 will land nicely in at least 10 knot direct crosswind, with full flaps, quite happily.
Personally, and a bit like a "fraidy cat", I would simply rather be going more slowly should something bad happen, and the more flap I have out, the slower I'm going!