The tongue and groove system accomplishes several different things. First, it locks the boards together, so you do not get uplift as easily as you would if the boards are square cut. Second, the tongues partially hide the gap between the boards that inevitably opens up during the winter as the boards dry out. And the tongue hides the nail.
The North American Flooring Association (http://www.crescenthardwood.com/nofma/wfp.pdf
states that square edge flooring is face nailed.
It may be possible to use hidden fastener techniques with square edge boards. In fact, there are a variety of systems commonly used on square edge deck boards, as most decking is sold square edge. I notice that Kreg has a new system of blind fasteners for deck boards, which might work with flooring installations as well as outside lumber. The deck board blind installation systems I am familiar with work with screws, but there may be nailing systems as well, I have not seen them. Some of the deck board systems use special fasteners that require grooves in the lumber. I would be interested to hear if anyone on this forum has adapted outside hidden fastener techniques to inside work. Personally, I have always used tongue and groove hardwood for inside work, with traditional blind nailing techniques.