You have to buy it separately. It fits on the accessory shoe to the left of the eye level viewer. It uses the main camera battery and it works well but it is too bulky to use with the leather camera case.
Unfortunately there is no internal flash light. You have to buy a peripheral light made specifically for the Nikon V1. The V2 comes with an internal light. The question about whether you should buy the D3200 or the V1 is a tough one, since they both represent very different value propositions. The D3200 is going to be more capable and its IQ (image quality) will be better. But the V1 is a whole different category: it's meant to be a balance between compactness, portability, and IQ. The smaller a camera, the less it becomes comparable to the larger DSLRs. The V1 should be compared to micro four-thirds cameras made by Olympus & Panasonic, as well as other mirrorless interchangeable lens systems (Sony's NEX series, Canon Eos M) and high-end point-and-shoots, like the Sony RX100. I personally bought the V1 because I like having restrictions, it forces me to be more creative. And for what it is, it's a fantastic camera: well made, excellent quality images, and highly compact.
There are a lot of variables, the most important being the ISO you set and the lens you use. I've gotten shots at out to about 50 feet at a high ISO and with an F2.8 lens (on the FT1). With standard optics it's probably about 40 feet. I don't think you should use flash distance as the major deciding factor, though. To me the big advantage of the V1 is the 2.7x focal multiplier. A 30-110 lens is almost 300mm in 35mm equivalent terms. To get that on a D3200 you'd need a 200mm lens, which is big and heavy. Put a 18-200 zoom on the V1 with the FT1 adapter and it zooms out to over 500mm in 35mm terms, which is more than a 300mm lens on the D3200.
No light on the V1, but still the price is attractive. I own both the V1 and a D90 (a DSLR a few levels above the D3200, although not in pixel count). I use the camera's for different reasons. The V1 is my go-to compact camera. Very good image quality, and since it goes everywhere with me I get shots I wouldn't otherwise get with a DSLR.
I have the Nikon V1. There is no built in flash but you can purchase an assessory flash which I have not done yet. Since I like to take photos without flash I have delayed buying the hot-shoe flash. However I just returned from the Perot Museum which proved I needed the flash attachment. . . waiting for a sale.
There is no built in flash on the Nikon V1 - the external flash sb-n5/n7 are available as independent items. They add immense opportunities. The V1 already has fast auto focus, and with the added sb-n5, capturing fast action (i.e. kids, etc.) has never been easier. The V1 fits in the pocket; the D3200 does not.