Who cares what the User's Manual says? You want the option of using the flash in Macro Mode, don't you? Well, you can and it's very simple:
With the camera on, select a mode that will get you the flash (forced flash or automatic, they both work). Be sure the macro switch is OFF (in the down position).
Press the yellow shutter button only halfway, until the green LED below the viewfinder glows.
Holding the shutter button, slide the Macro Mode switch ON and ready your shot. The green LED will continue to glow steadily.
Take the picture!
Note that to take another picture with flash, you have to return the Macro Mode switch to its OFF position first.