Chain of Command too is based on the fact that the Enterprise-D is the flagship. I see the "flagship" function essentially as a representative one. It's mean having a Captain able to deal with all types of assignments: exploration, science, diplomacy and battle. There's a prestige to serve on the E-D, but that doesn't mean you are one of the best. There's too much personnel transfer for that and it doesn't make sense to put all the best officers on the same ship.
What I find stupid it's NCC-1701 seems to be the only registry number to have been reused in the time. Christopher Pike and James T. Kirk were not the only valuable Captains of Starfleet history. I mean, the Sisko's Saratoga could have been for example the NCC-1887-C.