IMO, bouncing flash light is a horribly inaccurate waste of the flash's power making for longer flash recycling, as well as producing too-flat lighting that susceptible to ugly tints caused by the color of the bounce surface (as can be seen in some of the sample images in earlier responses). And it's not possible with most Smartphone cameras that I've seen!
I have no idea how Smartphones handle flash. But a cloth over the flash might be work and may be the only possible option.
A white cloth or other form of diffusion does, in fact, soften and improve direct flash lighting, without the unnecessary problems of bouncing (and a cloth might be your only option with a Smartphone). If you look at the flash of most experienced event, wedding and portrait photographers you'll find they are pointing the flash(es) directly at the subject and usually modifying it with a diffuser of some sort.
I shoot with Canon and often use two or more layers of white gauze bandage over the flash head....
...both to diffuse it and to reduce the output of the flash when using it up close for macro shots like this...
I can vary the strength of it's effect with more or less layers of the white gauze bandage.
Here I used the flash directly for fill (reduced power, about -1.66 stops), without any diffusion...
Indoors where I am using the flash more fully, I'd be more inclined to diffuse it. I'd still usually not bounce it unless really, really desperate... such as I forgot to bring my mini-softbox! Note: bigger is better, when it comes to softboxes... But something is a lot better than nothing and when walking around shooting handheld candids... and a mini-softbox is a lot more practical than dragging around a 45" softbox!
To improve your portraits with a DSLR, I first recommend getting the flash out of the hot shoe. Get a flash bracket to mount the flash on... and in most cases an off-camera shoe cord to connect it to the camera (some now can be used wirelessly). This will move your flash up away from the lens axis and off to one side, which both reduces risk of redeye and makes for better shadow effects.
Many modern flashes also have a small, built-in diffusion panel that's primarily intended to use with extra wide lenses... that also can serve at times, when just a little bit of diffusion is needed.
I shoot with Canon gear and the way their ETTL (and ETTL II) works is that the camera actually fires the flash twice for each exposure.... the first "pop" is a pre-flash at reduced power (1/64, I think) that the camera uses to calculate a correct exposure, then uses to set the flash output, after which it finally fires the flash at the setting it determined. All this happens so fast it seems like a single "pop" of the flash. The latest ETTL II also can use distance information from the lens, determined by where it's been focused.
This is TTL metering, much as those old Oly film cameras did. But it's now much more accurate and flexible. Measuring flash off the film didn't take into account subject tonality, which I can adjust for using Flash Exposure Compensation with the modern metering method. Also, with current cameras and their dedicated flashes it's possible to use the various meter patterns: evaluative (aka, matrix), center weighted, partial and spot metering. I don't think this was possible with the old school cameras and flashes.
I don't know if all the camera manufacturers meter and control flash exactly the same way... but I bet it's something similar.
Regarding your second question, I have several "portrait" filters that do what you want to more or less. Some are homemade. For example, I made a couple with small pieces of black mesh "netting" (finer and coarser) that's stretched and trapped between two empty filter frames. Others I bought, such as black, white , clear and flesh-tone "splatter", as well as some with etched grids or circular patterns.
These have different effects. Black mesh and "splatter" reduce fine detail (such as wrinkles in skin and fine hairs) but otherwise are "invisible" without effecting sharpness, more major details or inducing any flare or color tints. White and clear do similar, but tend to cause flare effects too. Flesh-tone will cause color tints and flare. Etched patterns typically just cause overall softening and flare. Those with an etched grid also can create "star" effects, while those with a circular pattern have sort of a "fog vignette" effect. "Splatter" is literally that... the filter looks like someone randomly sprayed some thick paint droplets onto it. Some of these can be accomplished pretty well in post processing software, but it's often not quite the same as a filter.