He got his flames back due to the fact Falcoon can't piece together continuity.
Iori's benifited massively from the system change, almost like the same way that all changes to Iori in any KOF since 98 were inherent in the SYSTEM and not in the character.
Since you can now cancel off any single hit, Iori can do his oldskool 2d style combos, and very easily to boot. Most of his stylish arts are unchanged, but now not having to rely on them is a massive upgrade.
Yamibarai A ver is the normal flame projectile, C ver is a 'double reppuken' ver that doesn't stack, and only goes a short way. A button ver supercancellable.
Aoihana A ver is the classic 3 hit, C ver has a lunging flame uppercut for the final hit that's jugglable. All 3 hits are supercancellable.
Kototsuki In is fast like in 2k3, and comboable just about off anything, but if the opponent is not cornered Iori won't do the followup. Not supercancellable.
Tsumagushi (the 98
+k claw) is as slow as in 98, but due to the way MI2 is, it will combo off any attack that launches. I've yet to find a followup AFTER it tho. Supercancellable.
Kuzukaze is same old same old, the stun time is pretty huge. Again, benefit is seen from allowing cancels off a single far C as the classic DM combo works well.
Ya Otome is more or less the same, don't think it's changed much. The animation overall has been slowed down and all the hits look a lot more painful, especially the explosion at the end. Comboable from...use your imagination, chances are it'll work.
Saika is interesting, done on it's own with the A button, it's the XI ver, exact same startup speed and hit, only diff is it's WAY comboable and does pretty good damage. C button ver has the two air slashes before it, will juggle an airborne opponent. Typical followup after Ya Otome does pathetic damage and isn't worth it.
New DM...Chi no Bousou (?), has Iori power up a flashing red and he gains Riot of the Blood speed, and he can repeatedly, almost infinitely cancel normals into one another, just spam C till the mode ends....OMFG BORKEN YAS PRZ...
New DM, San Shingi Sono Futatsu...more or less it's the SvC ver where he elbows them first rather than do the overhead like in 2k3/XI. But unlike SvC it's not a throw, the elbow is a strike, so it's easily comboable. It must be said tho...THIS MOVE LOOKS FREAKING AWESOME IN 3D!... Has to be seen!