Airline pilots - can you help me with 'flaps' 'speed' and 'lift'?

A great deal depends on the details of the situation, making it difficult to comment on this specific case, but yes, in general, raising flaps reduces lift. It also reduces drag. Usually the first flap positions substantially increase lift without adding too much drag, but the fully extended positions add not only lift but also a great deal of drag. Engine power must be added with full flaps to compensate for the large amount of drag that they produce.