I see that on some buildings your can place a sign on the roof, or a flag in front of it. Does this serve some kind of purpose or is this just for looks?
The flags and signs are purely for cosmetic purposes. The only cost 200 simleons. The misleading information that signs make it easier for sims to find the public building (hospital etc.) is SimCity humour/sarcasm.
The signs for the exhibition centre, pro stadium and casinos however actually attract tourists, but these signs have an hourly rate you must pay.