Well, can we at least frown upon it?
Many people do frown upon it, but it's a protected act under the Constitution, and while people may not like it most will fight to allow them to do it.
So as a bystander it would be illegal to prevent/stop others from burning the/a national flag?
Yes, because you don't own the flag, nor would it be legal for you to restrain the person, so the most you could do is try and put water on the fire and say you were stopping it from spreading.
Would it be considered littering if this person mysteriously encounters a handful of cat-sized flags in their front yard the next morning as a consequence from the water?
(couldn't resist, on the other hand I actually would like to know)
Ok under law, if they didn't put the cat-sized flags or give permission for someone to do so on their property, it would be littering. You could put cat-sized flag on public access property as a protest, and that shouldn't be a problem. Now in front of most home in the US there is a public right-of-way, (understand I'm not a lawyer) and you should be able to place them there.