Reflowing basically means that the text flows to the next line, regardless of how wide the display is.
For example, opening a TXT file in NotePad, with wrap turned on, and resizing the window width would result in the text reflowing to accommodate the changing window width.
This is, of course, something that a fixed layout format such as PDF can't do, precisely because it
does hold the layout sacrosanct, as you put it. That's its strength, but it does make it problematical to use with displays that aren't large enough to accommodate it.