At first blush this would indeed seem to be the flag of the 7th Tennessee Cavalry as both it and the flag for Rucker's Brigade (7th Alabama Cavalry) both have an Aberdeen, MS connection.
I pulled my file on the 7th TN Cavalry and also referred to Bob Bradley's provenance for the Rucker flag.
Bob states that it was donated to ADAH by Capt. C. P. Storrs and that he recalled in being presented sometime in 1863 while in Tennessee. The material for the flag came from Mrs. Leedy's wedding dress. When it was presented, Storrs' compnay was selected as color company for the regiment (CO. F, 7th Alabama Cavalry).
The provenance I have for the 7th Tennessee Cavalry is as follows:
The article you cite above dated March, 1864 but there's more in the regimetnal history of the unit. As follows, "But the old flag whose blue cross had been triumphantly borne aloft for years...On the eve of surrender, the men reverently gathered round the staff in front of regimental headquarters, and tearing the silk into fragments, each concealed in his jacket, a bit of the covted treasure. The flag had been a gift of a young lady of Aberdeen, MS..."
The flag the 7th Tennessee Cavalry received from Aberdeen was a silk Second National, based ont he white and the blue cross mentioned above. The Rucker flag has a red cross. Also, the 7th TN veterans tore up their flag rather than surrender it and the Rucker flag survives.
This is the second Second National flag that I have found for a Forrest's Cavalry Corps unit dating to late 1863/early 1864. The other is for the 18th Mississippi Cavalry Battalion, who lost their colors at Brice's Crossroads.
Forrest's Corps does not get their 12 star Mobile Depot flags until July, 1864 based ont he flag maker invoices I have, so before then they are using some First Nationals (there is a Union Brice's account of these flags being there) and at least two Second Nationals (and maybe more) for the 7th TN Cavalry and 18th MS Cavalry BTN.
I guess those ladies of Aberdeen sure loved to make flags - which then begs the question - how many more did they make and who got them?
Hope this helps.