It's both, as stated.
Based on my limited understanding of this stuff, they are signaling in a very real way to Flynn that they have a green light to indict him, and they are actively questioning people he works with, etc. This applies pressure to Flynn, who presumably would like such things to stop. Each step they make towards a suspect "makes it real". To stop them, he can attempt to plea now, and depending on the plea deal, it could mean he is indicted on fewer charges, etc. So in this way, it's basically holding him down and telling him to say "Uncle", rather than let the beatings continue (you know what I mean).
Chasing one person on one crime makes it very hard to take down broader conspiracies and organizations, if not impossible in some cases. You have to work your way from suspect to suspect in the hopes it will lead to all criminals involved, and typically you want to go as high as possible so that you stop the crime at the root. Since that's the case, they have to be creative in how they break the "honor among thieves" behavior that can sometimes protect those at the top, leaving the smaller fish to get charged with lesser crimes.
