This might as well be one of the most interesting topics you've dealt with so far. Honestly, I had a ton of questions for you while I was watching the video, but in the end you answered pretty much all of them when you spoke about "fake" flow and that sense of immersion that some games give you that's not really flow. I was actually thinking that sometimes plot or activities that are not skill-based and challenge-based can make you lose the sense of time, but again, you addressed this.
The challenge\skill diagram was actually mind blowing. Nice one!