That's a good explanation of flexicolors. I wanted to add a couple notes - first is that the order of the Flexicolors does matter - F1 will be applied first, F2 on top of it, etc. This allows you to do blended colors as well, as your flexicolor maps can have greyscale values. Like so:
Butterfly base color (there's color for the body, but it's a little hard to see. The wings are entirely 90% grey (Butterfly_Monarch_BC):
Flexicolor #1 (Butterfly_Monarch_F1):
Flexicolor #2, with greyscale to allow for blending (Butterfly_Monarch_F2):
For the icon, I've just been doing a transparent PNG file at 128 x 128, and using PNG-8 (256 color) format, as the file size tends to be significantly smaller than PNG-24 (supports up to 16 million colors). In Blender, I make a render with the world ambient color turned all the way up to white (and sometimes add a little lighting on the model if it needs extra). I then screenshot it with the Snipping Tool, open in Photoshop, and select and remove the background. (I'm not really familiar with graphics programs other than Photoshop to give guidance, unfortunately)
I believe removing the background is only technically relevant for grid-based pieces, as the grid will then show up in the background, but it seems to be a good habit to get into anyway.