I'm an AG brewer - I managed to hit 1.037 which I was very happy with. I would not replace the flaked barley with anything. The flaked barley adds a nice 'grainy' flavour that you would definitely notice was missing.
Flaked barley does need to be mashed so you may want to do a partial mash. It is just steeping at 150F for 60 minutes and then rinsing the grains with some 170F water. If you re-run your calculations in beer smith as a partial mash recipe you will probably find the OG agrees with the clone recipe (or close enough).
Partial mashing is really simple stuff and easily accomplished on a kitchen stove with a colander (that's how I did my first few). You'll be surprised how much it can improve the quality of your beer as well.
There's a nice
article on the wiki about it (it includes a link to building a simple cooler mash tun if you decide to go that route).