I don't know if you have read the manual, but the flash needs to be raised for the flash to come on and you need to force the flash to "on" manually by pressing the button with the flash sign - auto, off or on (if you want flash all the time). It will not flip on its own.
As for the image quality setting, you will need to press the function button and scroll down to image resolution - L, M, S, etc. and toggle via the set button to choose the jpeg compression quality - SF, F, M, L etc.
There are a lot of features on the S3 and I suggest you read the manual and try to understand what each is for.
Personally for me, I always like the complexity of the S5 as it allows me to have better control of the images I took. It's like having to think before starting on anything.
If you are on "Auto" all the time, then I believe you have bought the wrong camera.
Hope this helps and good luck!
--
Yus.
'Photography is the Art or Process of Producing Images,
The Art of Photography is Another Story.'