Why do the GS and LOC indicators blink?
From this copy of the flight manual for the 737:


  Glide Slope Pointer and Deviation Scale
  
  ...
  
  At low radio altitudes, with autopilot engaged, the scale turns amber
  and the pointer flashes to indicate excessive glide slope deviation.
  
  Each pilot’s deviation alerting system self-tests upon becoming armed
  at 1500 feet radio altitude. This self-test generates a two second G/S
  deviation alerting display on each attitude indicator.


And for the localizer 


  Localizer Pointer and Deviation Scale
  
  ...
  
  At low radio altitudes, with autopilot engaged, the scale turns amber
  and the pointer flashes to indicate excessive localizer deviation.
  
  Below 1,000 feet AGL, with LNAV engaged and LOC armed, the localizer
  scale turns amber and the pointer flashes if the localizer is not
  captured. 
  
  Each pilot’s deviation alerting system self-tests upon
  becoming armed at 1500 feet radio altitude. This self-test generates a
  two second LOC deviation alerting display on each attitude indicator.


What is interesting is that the pilot seems to be right on slope and right on the localizer so I would presume it is NOT flashing as a result of excessive deviation.