From the viewpoint of developing characters, the more lemons you throw at them the better. Well, you do want to find out what your characters are made out of, yes? You want to find out their hidden depths, yes? Chuck them in the deep end and have fun finding out how they get themselves out of it. If they need to resort to the help of friends to get out of said horrible deep end, what did they try to do first before calling for back up? Is the back up reliable? You want plenty of tension and drama and writing these scenes should easily produce that. You can work out later on what you want to keep for your story and what might prove to be useful background knowledge to you only.
As a writer, when all that seems to come your way are rejections, firstly bear in mind nothing worthwhile was ever easy and, secondly, most writers go through this. Even after publication in one avenue, rejections still come in. I find it useful to look at work that has been turned down and see if I can revamp it and send it out elsewhere. Usually I can and I have had work accepted by another outlet after doing this. The important thing is not to give up but it is perfectly okay to change direction with your writing. If you decide flash fiction isn't for you but the longer short story form is, then that's fine. Play to your writing strengths. It is also fine to pause from writing. I generally only do this when on holiday or ill and I use the time to catch up on reading (I always have reading to catch up on!) and that helps feed the imagination beautifully.