I'm really glad to see that this is settling down. It's a testament to your merit as a leader here that you were able to reexamine your actions and see where you might have altered course for better overall results.
I personally think that you were entirely justified in the actions you took, but it isn't always best in the end to cling to being right. Your post here demonstrates that being right is less important to you than promoting a quality platform with peaceful interactions and that's commendable.
It might also serve as an object lesson to us minnows. The couple of times I've seen plagiarism I just noted in the comments that unsourced unoriginal images can get the post flagged. Seems safer than actually flagging.
As for abusive language and trolling... I feel like that will likely weed itself out if no attention is paid. Trolls feed on reaction so I generally choose not to give it to them. I'd far rather ignore than see this be a place of censorship, though it is my understanding that the flags you placed were in response to revenge flagging rather than offensive speech.
As always, great post and thank you for your support of the small fries.
Thanks