I'm probably the last guy that should be answering this... but what the heck!
First off, what are you seeing on the hood? Is it swirled, are there random scratches all over the car?
"Flashing"... instead of answering it myself, I'll quote what Mike Phillips once wrote on Meguiars.
The word flashing is usually used to describe the way a thin solvent evaporates quickly.
M105 is not a thin solvent so my guess would be it's people trying to describe the product drying?
So, in lay-speak, when people say "flash" it means when the particular product has gotten to the point where it is no longer properly performing its intended function (so maybe it has dried up - or is no longer present on the surface).
Back to your issue...
M205 is not a very aggressive product but can certainly correct swirls, but it is very contingent upon many factors, such as pad choice, pad size and the paint itself (is it hard or soft).
If say you used your PC on speed setting 4 or 5 with a 7 inch Meguiars polishing pad, you probably aren't going to have too much success with correction work. On the other hand, if you use M205 in conjunction with a 4" flat pad on speed setting six, you *might* see more correction.
You'll see that many pros here will mark out a test spot so that they can dial in on a combination that works for on a particular paint. It sounds like you are working in the right direction, you just need to find out what combo is going to work for you.
You could jump right to M105 (which has much more cut) or you could try something in between, like swirlx or scratchX 2 (or many of the Menzerna polishes which I don't use so I won't talk about).
As for working time...
Again, this varies from one situation to another and is dependent on other factors as well. For example, if it is super hot and the surface of the car is hot, I find M105/M205 dry up really quickly (M105 in particular). If however, you've primed your pad and you are using M205 on a clean cool surface, you should be able to polish an area for 3 minutes (or possibly more).
I hope this helps.