Yea, eventually (maybe, depending on what size you get initially lol) the Emporer will outgrow a 125gal. I think the flame would (if you prefer a flame over a wrasse) be fine in that tank. I would suggest waiting till the tank is mature, as dwarfs will graze on the rock all day. I would say get a more decent sized flame, compared to some of the quarter sized ones I've seen for sale.
You might have a problem getting him nori/seaweed on a clip, the puffer will probably rip it off. So get a piece of branch rock and rubberband the nori to the rock and place it near whereever the flame likes to camp out.