Coastal streets were inundated with ocean water, causing damage to dozens of homes and businesses, officials said.
The National Hurricane Center projects Florence's landfall near the North Carolina-South Carolina border on Saturday morning; however, the storm will be spinning just offshore - stalled out - east of Wilmington, NC for about 36-48 hours before that.
In the North Carolina town of New Bern, rescuers removed more than 100 people from rising waters, but about 150 more had to wait when conditions worsened and a storm surge reached 10 feet.
In addition to the life-threatening storm surge, Florence is also forecast to dump up to 40 inches (1m) of rain after it makes landfall in North and South Carolina Thursday night or Friday.
After all that, what is left of Florence will turn north towards Rochester. According to the National Oceanic and Atmospheric Administration's prediction, all of coastal North Carolina is at "high" risk of flash flooding, with "moderate" risk, even 30-50 miles inland.
More ominously, forecasters said the onslaught on the coast would last for hours and hours because Florence had come nearly to a dead halt at just 3 mph as of midday.
More than 80,000 people were already without power as the storm approached, and more than 12,000 were in shelters.
"Florence is still a risky storm", said Rebecca Fuller, a meteorologist with Radiant Solutions in Gaithersburg, Maryland.
Officials said people refusing to evacuate could end up alone, drenched and in the dark, as rescue crews won't go out to help in winds above 50 miles per hour.
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As of 5 a.m., Florence was 25 miles (55 kilometers) east of Wilmington, North Carolina. Forecasters said that given the storm's size and sluggish track, it could cause epic damage akin to what the Houston area saw during Hurricane Harvey.
"WE ARE COMING TO GET YOU", New Bern city officials said on Twitter. A city spokeswoman Colleen Roberts told WRAL-TV that 200 people have already been plucked to safety.
The National Hurricane Center says the Neuse River near the city is recording more than 10 feet (3.05 meters) of inundation. "Our greatest concern about this storm remains the same - storm surge and massive flooding", he said. "You may need to move up to the second story, or to your attic, but WE ARE COMING TO GET YOU".
Florence should continue losing strength as it menders along the coast, weakening further as the storm travels across inland SC on Saturday, the weather service said.
As of Thursday morning, forecast models showed the storm bringing more rain than originally thought - officials now predict 35 inches of rain will fall in a two-day period as Florence, now a Category 2 storm with 110 miles per hour sustained winds, will stall over Wilmington after making landfall early Friday morning.
The hurricane's surge could cover large swathes of the Carolina coast under as much as 11ft (3.3m) of seawater.
Tornadoes are possible in eastern North Carolina through Friday.
A buoy off the North Carolina coast recorded waves almost 30 feet (9 meters) high as Florence churned toward shore.
"A storm surge warning means there is a danger of life-threatening inundation, from rising water moving inland from the coastline".
Hundreds of thousands of people in the Carolinas and Virginia have been forced to evacuate as Hurricane Florence battered the eastern coast of the U.S., including more than 3,000 prisoners who have been relocated from jails in the path of Florence.