Flagging is mentioned in the Help Centre as being a way to bring content to the attention for review.
The help centre also provides info on what some of the flags do, such as "Spam/Rude or Abusive", which are used to eliminate truly inappropriate posts. We also see that the custom flags are placed in a review queue for moderators.
But for the flags under the "Needs Improvement" category, there is no indication on what they do in the help centre.
I notice that once the required reputation is gained, the flagging area for "Needs Improvement" is removed, and you now get the ability to vote for closure.
Are "Needs Improvement" flags simply placed into the appropriate review queue ("Close Votes", "Low Quality Posts"), or is there anything else special done to them?