That additional settings field is where you can specify any additional TinyMCE settings that PW doesn't have dedicated config options for. These are the TinyMCE settings it's referring to: http://www.tinymce.com/wiki.php/Configuration
So you could put this one one line in that additional settings field, as an example of specifying the theme_advanced_styles option in TinyMCE:
theme_advanced_styles:Header 1=header1;Header 2=header2;Header 3=header3;Table Row=tableRow1
So the only thing that's not working is changing the link (and link content), right?
If that's the case and you only have two languages, something as simple as this should do the trick:
<?php
$lang = ( $user->language->name == "finnish" ) ? "default" : "finnish";
echo "<a href='./?language={$lang}'>{$lang} flag</a>";