I'm not sure anyone makes a dynamo powered taillight bright enough that it would be considered daylight visible. Nor do they flash. You would have to build your own, it seems.
A bright light may have prevented this but I regularly see drivers doing things that no light can protect people from. Thankfully, no one is in their path most of the time. I think the resistance here is it the original post borders on placing some fault on the cyclists rather than just discussing ways things like this might be prevented. The only thing it seems safe to assume is that the driver should have been performing his obligation of paying attention to the road.
Sad to hear. They sound like they were wonderful people having a great trip.