The kick it straight in the flare sets you up for some interesting arrivals if your not spot on.
But the again taking the drift off at 500ft isn't the best plan either.
Personally I would start easing the crab out at about 50ft so that I am cross controls as I begin to flare.
On the subject of what stage of flaps to use I have always used the full lot right up to the demonstrated xwind without an issue.