Flow control requires the cooperation of both ends. RTS means Request To Send and CTS is Clear To Send. Typically the RTS of one side is connected to the CTS of the other. So when a device has data to send to the other device, it waits until CTS is asserted before it begins transmitting. The device that is receiving would assert RTS when it's not busy with other tasks and when there is buffer space available (if it's a buffered implementation, which is common).
Note that in the typical case of a full duplex link, both sides can transmit at the same time, so each end would have both CTS and RTS lines.
So, in your particular case, Device 2 does not support hardware flow control, so you won't ever get flow control signals from that device. This means that for Device 1 to communicate with Device 2, it should either have hardware flow control turned off (check your UART data sheet) or should have the input signals (RTS in this case) hardwired to always allow sending.
Alternatively, if Device 2 is part of a microprocessor, you may be able to do your own hardware flow control using spare GPIO lines to serve the function of CTS and RTS.
CTS bar (commonly indicated as \$\overline{\text{CTS}}\$ or #CTS) would simply be an inverted version of CTS. Adding the bar or the # are two common ways of indicating the inverse of the usual logic sense, hence a \$\text{RESET}\$ line, which is often active low, is often shown as \$\overline{\text{RESET}}\$.
