The manual that comes with flexwatt very clearly states a 1/8 gap is required for safe operation and to avoid excessive heat buildup. I would follow the safety instructions of all heating products. Leave a gap it is safer.
I am not sure that flexwatt is the way I would turn anyway. The big reason why flexwatt is used is ease of installation in racks and cost of large amounts. It doesn't sound like you are using a huge amount and there are safer alternatives on the market easier to manage as well. Flexwatt can become exceptionally hot 160+ unregulated or in the case of a T-stat failure there are a handful of other heaters on the market that do not become so hot in the case of a failure. This makes them less likely to cause issues. Products like ultratherm, intelliheat, and others will only hit 100ºF unregulated so even during a failure serious injury is unlikely. As this is the max recommended operational temp for flexwatt (95ºF) and it should not be operated past this temp it really makes no difference.
http://www.beanfarm.com/heating/flexwatt_userinfo.pdf
http://www.calorique.com/pdf/PetWarmingElements.pdf