The problem
One of the recurring questions on Meta is "why was this question closed?" In nearly every case, the question is posed by a newcomer to Stack Exchange who doesn't understand what closing means. The new users get frustrated with the (apparently) inscrutable, hostile SE system while Meta regulars get frustrated with new users who (apparently) don't care about how the site works.
Experienced users know that closure isn't inherently a negative thing, but to new users, "closed" often looks like "this question is worthless and irredeemable, just like its author; i.e. you suck." Yes, everyone should just read the FAQ, but let's be honest, it's not going to happen. Even if they did, though, it'd be better to build a system that doesn't cause confusion in the first place.
Things new users don't know about closure:
- On SE sites, "closed" is not a synonym for "deleted"
- Closure just means "this question is not adding value right now," not necessarily "this question is irredeemable"
- You can go back and edit your closed question to improve it
- You should go back and edit your closed question to improve it
- All closure does is prevent new answers from being added; commenting, editing and voting can all still happen
A solution
Therefore, I propose changing the term "closed" out for... something else. The new term should give a sense of transience rather than permanence, and encouragement rather than punishment. It's too bad "flagged" has a meaning on SE already; if it didn't, it would fit really well. "Suspended" or "needs improvement" might be suitable terms. "Abeyance" is close, but is probably too fancy a word to actually get used.
Better suggestions are welcome. The important thing is that we indicate that the question, while imperfect in its current form, can and should be improved.
Not up for such a drastic change? We could also add a "what does this mean?" or "how can I undo this?" link to all closed questions that point to the close FAQ or a similar page. Maybe the help link would appear only for the OP. Example: