It's definitely an improvement. Still, I would advise against it in general, especially for arbitrary pairs. This category of attacks can be difficult to foresee and even arise after deployment due to new incentives outside of the system.

While Chainlink has its own host of issues and risks, there are still valid reasons why companies are paying them and their node operators good money to feed price contracts for ERC-20 token pairs.

Could you not still use flash loans in attacks that take longer than one block? You'd have to pay the loan back within each block, but it seems like you could still shift markets enough to take advantage, if you were willing enough to take on some risks.

That'd be quite expensive. And as you manipulate prices across blocks, arbitrageurs would arb it back to "market price". Uniswap V3 allows for a 3rd party smart contract to ask its Uniswap V3 Oracle to employ a 9 day moving average price - which is of course, not very useful as a "spot price", but is super hard to manipulate.