I read an article stating that when applying flashing tape you should not install it over the bottom nailing flange just the head and sides. Is this true? if so, how can you seal the bottom nails heads then?
The bottom nailheads don't need to be sealed over. I suppose you could put a blob of caulk on each one if you want....
Ideally I like to have the flashing tape under the flange on the bottom. It will then seal to the nail shanks.
That is correct, if you tape the bottom flange and water does make it to the sill it will trapped. I the weather barrier and sill flashing are installed correctly then any water that may get to sill should be able drain to the outside of the WB.