Writing the .flash file to flash on the target

The format of the data on the flash depends on what the boootloader code expects.

Since you don't want it to be anywhere near the size of an S record file (which is probably 3 characters/bytes for each data byte).

I suspect the bootloaded needs address:length:data triplets - all as binary data with some defined endianness (etc).

Personally I'd either write a bootloader that can directly process the ELF image (having stripped out all the unnecessary sections), or write a program to extract the loadable program segments together with their offsets and sizes to make a smaller file.

I wouldn't go via S record format at all!

I actually suspect that the Altera boot code can only load to one contiguous block of memory.

This is rather sub-optimal in the extreme if you are trying to load code into tightly coupled instruction memory and also initialise multiple separate data areas.