I understand now. I assumed that since the spouse box appeared in the box chart as an unknown person when their flag=N, that there was a reason why their name did appear.
There is. The spouses don't have the Flag set to Y, so they don't exist as far as the chart is concerned. Thus they are "unknown."
Is a 'focuse group' the best way to approach this issue?
A Focus Group will do nothing for you. You cannot use a Focus Group to control who is in a chart. A Focus Group can only be used to control the starting persons of a chart. If you use a focus group you will get a set of charts, one starting with each person in the FG.
Which leads to a larger question: I've operated under the philosophy that a spouse is not a descendant and therefore had the flags set accordingly. Is this an appropriate position to have?
There is no "appropriate position." The Flag is not a standard Flag. You invented it, so it means whatever you want it to. Why did you invent it and what do you hope too use it for?
What others options are available to having the spouse identified on the descendant chart without having their flag set so?
Turning of the Flag Restriction. Why did you turn it on in the first place? A Descendants Box Chart will include only descendants and their spouses by definition so I don't see how it could be helpful.