I'm pretty sure this is not how these endings are connected. If you spare the Iron Flail you will never get a peaceful ending, I tried that. But perhaps they are connected somehow, I've seen another entry in the files where Stalwart stops working on the Forge but prospers as a traditional hunting town. So maybe if you save enough citizens, kill the Iron Flail and banish the Eyeless that's how you get it.
But, personally, I already found my best endings, so I'm not gonna play through all that again just to test it.
Old topic i know. but i feel like i should post this because this pretty much was the only proper google search result when i was looking how to get the best white march ending
You're wrong about needing to kill the iron flail to get a good ending. i spared them (even after murdering their whole camp first) and after forging the hammer i told the stalwart guy to shut up and let them help. or to be exact ("you did not just tell me what to do" XD) which got me the aid of the iron flail. in the ending sliders they seemed to get along great. stalwart realising they didn't have the skill to do it all on their own welcomes both dyrwood and readceras. I also told that one npc that crucible knights should HELP and INSTRUCT at the forge but not take over completelly.