This study presents a comprehensive multi-objective optimization framework for optimal placement and sizing of distributed generation (DG) units in electric bus (E-bus) transit systems integrated with a high-power flash charging infrastructure. An enhanced Multi-Objective Grey Wolf Optimizer (MOGWO), utilizing Euclidean distance-based Pareto ranking, is developed to minimize power loss, voltage deviation, and voltage violations. The framework incorporates realistic E-bus operation characteristics, including a 31-stop, 62 km route, 600 kW pantograph flash chargers, and dynamic load profiles over a 90 min simulation period. Statistical evaluation on IEEE 33-bus and 69-bus distribution networks demonstrates that MOGWO consistently outperforms MOPSO and NSGA-II across all DG deployment scenarios. In the three-DG configuration, MOGWO achieved minimum power losses of 0.0279 MW and 0.0179 MW, and voltage deviations of 0.1313 and 0.1362 in the 33-bus and 69-bus systems, respectively, while eliminating voltage violations. The proposed method also demonstrated superior solution quality with low variance and faster convergence, requiring under 7 h of computation on average. A five-method compromise solution strategy, including TOPSIS and Lp-metric, enabled transparent and robust decision-making. The findings confirm the proposed framework’s effectiveness and scalability for enhancing distribution system performance under the demands of electric transit electrification and smart grid integration.