Issues: Rear hatch is closed fully but the indicator light for the rear hatch is on. This prevents the keyless remote from locking the vehicle. Or the indicator light for the rear hatch flickers intermittantly while driving.

This is a complaint I see with second gen CRVs 2002-2006. I have a 2006 CRV. I believe this happened because a rubber sleeve fell off the switch causing it to not engage. Honda designed the tolerance for this component incorrectly.

Here is my solution for fixing it.

Crawl inside the trunk and close the hatch. Find where the hatch and switch make contact. Mark the location. Drill a hole and insert a screw in the hole. I used a 1/2 inch long panel screw from a junkyard Honda.
Here's my screw making contact with the switch with the hatch closed
Done

 

Another trick for this is slide a small piece of rubber hose over the switch. It's a little janky but most will never notice.

 

Excellent idea. Bypass the need for drilling. I like the hose idea over my solution