Yes, I will be using the swf file locally in the same machine as the arduino is connected to.
I was planning to use:
-- firmata as the code to run on the arduino... as it says 'never upload a single code to arduino again' 
-- serproxy/tinkerproxy as the socket server
-- Glue as the flash socket library... which uses AS3
-- And finally, I got no clue about the flash code...
The above stuff can change as you're comfortable with I am simply glad that someone decided to help