Anytime you replace the brake pads you should push the caliper piston back to the fully seated position. A C clamp works really good for this if you have the caliper free from the mounting bracket. Just be careful around the rubber caliper piston seal. You don't want to put a hole or tear in it.
Unless the brake system has been opened there shouldn't be any air in the lines so the bit about brakes being bled when pads are changed is incorrect.
With respect to brake fluid flush, the concern is entrapped water in the fluid in the lines. Brake fluid is hygroscopic which means it tends to absorb water. Periodically you want to run enough brake fluid through the lines and out the brake bleeder fittings at the calipers to flush out water that may have been absorbed and collected in the lines.
You can drill out the allen screw with your 18V drill. Get a couple of concrete blocks and place them under the jack pad points under the car and lower the car so that the weight is resting on the blocks, not the OEM jack. It's not as good as a good jack and jack stands but it's much safer than just the OEM jack by itself.
2006 Z4 3.0si Sport Package (But I'll still hang with my "homies" in the E36 forum)