I'm a stickler for appropriate use of literal/figurative, and I think it was used correctly here. In addition to the clarifying effect mentioned by other posters, the literal use of the word "wall" is being emphasized. No, you're not a literal flower on the wall, but you are a "wallflower" (figurative) that is standing by a wall (literal). Applying "literal" to half a compound word is unusual, but I can't think of a better way to phrase the concept.