The smaller your aperture (f/stop) number the "wider" the opening and the more light you are letting into your camera. This creates a blurrier background also known as "bokeh". You will get less area in focus with a wider aperture.
You don't need to use a flash to get the blurrier look. You would need to up your ISO if you are in low light in order to get enough light for the right exposure. The higher your ISO the more noise you will get (dependent upon your camera). Noise is extra pixels that give photos a grainy look.
Hope this helps. There are some other threads in the photog forum that might be helpful too.
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