1. Can I have more than 1 flag in one kind for example 3 black flags?
2. Do I have to use the shields to kill traitors or can I keep the flags and just take negative points for traitors?
1. yes, you can have as many flags of the same color as you want.
2. The rules say "First, the players need to repel the traitors in front of them" so my understanding is that you need to use them to repeal traitors.