I ask this because I can't seem to pick up the hole in the wall. I am doing everything I should,looking through it,trying to grab it,playing the flute. After I play the flute the hole returns to it's original position. Also,the wall flowers stop dancing and I can't grab the hole.

Nope it is not bugged.

You are missing something. After you are done playing the flute the wall flowers continue to dance and that is when you need to strike.