Flax is used to make linen flowers in the Studio (2 wool, 1 flax). It is also used to make feed for your sheep in the Feed Mill (2 wheat, 2 flax). I am not sure if it's used in candlemaking since I haven't finished building that yet. I see you are level 11 right now and don't have sheep or the studio yet. I'm not sure at what level those become available to you. Flax is usually easy to sell in your shop since people at higher levels need it, so it can be a good moneymaker for you.