Humm, I couldn't find a way to easily put them all together (comments and nodes authored by the users followed) but could create separate views.
For nodes created is easier:
Create a new View, change from Show Content to Show Users and in the Relationship add a Flags: User flag, choose your flag and Current user.
For comments created:
Create a new View, select Show Comments. In the Relationship add Comment: author to expose the Authors ID, select require this relationship. Add new Relationship, this time look for Flag: User flag, select the author's relationship created before and your flag.
As stated before, you might get all the content together but I couldn't get it in any easy way.