Hello, I hope the following assists you.
The air bag light flashes when there is a fault detected in the air bag system (SRS). Depending on where in the system the fault is the lamp should flash a code or remain illuminated. The only way to get the lamp to go out is by repairing the faulty circuit or SRS component. When the light flashes none of the SRS works correctly not just the circuit that has the fault.
The flash codes are as follows.
1 flash drivers air bag circuit low, high or open.
2 flashes, passenger air bag circuit low, high or open.
3 flashes, drivers or passenger air bag circuit short to earth or battery.
5 flashes, drivers side air bag circuit fault.
6 flashes, passenger side air bag circuit fault
7 flashes, drivers side crash sensor circuit fault.
8 flashes, passenger side crash sensor circuit fault.
There is no 4 flash code on the Cougar, this is for a seat belt fault but as far as I'm aware the Cougar doesn't use electrical seat belt pretensioners.
If the light comes on and stays on when the ignition is switched on this is usually a power or earth fault to the SRS control module or a module failure.
The Cougar has 2 different air bag systems and the 2 aren't interchangeable, the change date was around May 1999 so yours should be the later system. Also not all Cougars have side airbags, if it does then the seats will have labels on the side.
I hope this helps but if you have more questions regarding this let me know and I'll reply as soon as I'm able to.