First, good on you for not necro-posting.
Second, from what I can read, the knife will always move to a flanking position (unless you tell it not to) when it makes its attack.
Twilight Knife wrote:
You create a darkly sinister floating knife that attacks the same creature as you each round. If you choose not to attack a creature, or you make an attack that affects multiple opponents, the knife makes no attack during that round.
...
Unless you specifically will it to do otherwise, or it proves impossible to do so, the knife always maneuvers itself so that it can flank your opponent before making the attack.
Presumably, the knife attacks at the end of your turn, otherwise if it attacked before or during you could end up taking an attack that affected multiple opponents, and that would expressly go against the knife being able to attack. Since there's no movement listed, it will always just move to a flanking position (within range of the spell) and then attack.
Trish Megistos wrote:
So you could maneuver your knife into a position where one of your allies would help it flank, then fire off scorching ray or even better, fiery shuriken for up to 8 attacks (potentially two more with intensified spell).
Since it seems capable of flanking, certainly an ally could move to flank with it (or it will always flank with them if they're already there, when it attacks). You certainly could cast a scorching ray or fiery shuriken as long as they are all at one target, by the reading. If you attack more than one (multiple) then the knife would not attack. Regardless, only the actual flanking creatures (the knife and your ally) will benefit from the effects of flanking unless you have some ability that says otherwise (like dealing extra damage to flanked opponents or being able to flank with ranged attacks.)
As for the part about Intensified Spell and extra attacks, I believe the feat only increases the maximum damage by up to 5 caster levels (assuming you have those extra levels). For instance, a fireball normally caps at 10d6 damage, but with the metamagic feat, a 12th-level caster could do 12d6. For fiery shuriken and scorching ray the damage is set per shuriken and ray, not by caster level; each does a set amount of damage. Were you to have a feat or ability that raised your effective caster level in general, then yes, you might get extra rays or shuriken. Intensified Spell is specific in that it increases the damage cap based on caster level.
