I think it depends greatly on what results you are trying to achieve with the recording.  For a symphonic or even a pop sound where the flute is more of a fill or background instrument, the mic placed a bit further away would be what you want. Cleaner and not much breath sound.
 
For a tune where the flute is the star of the song, closer would work better. In a case like this, and especially with a wooden and Native American flute, you want that breath sound included. Use a pop screen to keep the pressure waves from hitting the mic.
 
New Age could go either way...... I have heard very distinct and breathy new age stuff and also very clean new age.