If you convert your FLAC files to AIFF or Apple Lossless to use in iTunes, you will have to perform the conversion with third party software such as dBpoweramp, etc. iTunes itself cannot perform the conversion.
I would personally spend $50 on JRiver Media Center, whose interface and management I like much better than iTunes and it also has better sound quality, unless you are wanting to use the native AirPlay feature of iTunes to stream to an Airport Express, Apple TV or other AirPlay enabled device.
Steve