Flying away from the station it is radial out.
The radial is always from the station and you can either fly in (towards it) or radial out(away)
You will need to be on an intercept heading for Nav to engage, but it will produce a message in the scratchpad if you are not..
Flap 1 is only slat so it doesn't actually create much drag as you are only creating extra lift. Drag only really starts from taking flap 2.