Unfortunately, it means that he is not available because he is seeing someone else. Saying that he is flattered is a way of being polite and letting you down gently. He obviously does not want to hurt you.
Some people might think that by saying he "wants to see where that goes", that he might be interested in pursuing something with you if his current girlfriend doesn't work out. But it could also be that he is trying to be polite.
My advice is to be confident about this situation--don't feel that you have to hide or that you can't keep being friends. But you might want to back off just a little (e.g., let him call you rather than call him for a few weeks) so that he doesn't worry that you didn't get the message. You guys have been friends for a while though and you are both mature, so I see no reason why you can't keep being friends if you feel able.
Good luck!
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i have to agree, I think he respects you and cares for you, but isn't looking to be with you right now.. he sounds young, and it is usually the case that most want to explore and just aren't sure yet. as for thinking he must "know" that you like him - guys can be pretty tactless, I know. sorry, but hope you find someone who is more outgoing.. opposites work wonders, if not attraction, and just enjoy yourself. :)
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he´s letting you down easily.
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