Well, first of all, welcome to the forum!
I don't frequent this board alot, so there are others who will be able to help you more than I can, but here's what little I can give you.
1. Yes, I would say you need to develop some muscle. All martial arts are physically demanding, and you need to have muscle to help you advance in your training (there are lots of other things as well, but building muscle is definitely important). As for what is the best way, well, since I'm not your doctor, I have no idea what your specific needs could be, but generally (remember, I'm speaking for MOST PEOPLE. I don't know you or anything about your health, so don't just take my word or anything) it could be safe to tell you that the basics, such as squats, crunches and push-ups (or press-ups if you prefer to call them that) are a really good starting point. Also, maybe some weights, like some 5-pounders? Just some tips.
2. Want to lose some weight? Hmmmm......well, once again, I'm no doctor, but you might want to review some key things. How much sugar are you eating? How MUCH are you eating? Me personally, I try to really, REALLY limit my soda intake (even diet soda), as in like 3-4 drinks a month (if that much). That might be a little extreme for you (once again, I don't know), but it's a good thing to look out for. Also, I seem to keep my weight down by just listening to my stomach. I try very hard to make sure that I'm actually hungry when I want to eat, and when I am eating, I try to remain conscious of whether or not I'm full yet.
3. Flexibility? The only way to get that is by stretching, over and over again. Here's something I used to do. When I woke up in the morning, I would reach down and try to touch my toes, and I would hold that for about 15-30 seconds. I know that sounds really basic, but it really, really helped. Once you can touch your toes, try doing other stretches (you can find them on the internet, probably).
Hmmm......well, I hope I haven't done more harm than good. Anyone else (who might be a little more qualified than me?) want to help him out?
P.S. If you look around on this board and some others, you'll probably find some other people who have posted questions just like these, and you can read what others said to them as well. Good luck!
"If life gives you lemons, you blow those lemons to bits with your laser cannon!" - Brak