In the context of the parallel flow hypothesis, we derive a higher-order generalized cubic-quintic complex Ginzburg–Landau (GCQ-CGL) equation to describe the amplitude evolution of shallow wake flow from the dimensionless shallow water equations by using multi-scale analysis, perturbation expansion, and weak nonlinear theory. The evolution model includes not only the slowly changing envelope approximation but also the influence of higher-order dissipation, dispersion, and cubic and quintic nonlinear effects. We give the analytical solution of the higher-order GCQ-CGL equation based on the ansatz and coordinate transformation methods, and we discuss the influence of the higher-order dissipation coefficient on the amplitude and frequency of the wake flow by means of three-dimensional diagrams, contour maps, and plane graphs. The subsequent linear stability analysis gives a theoretical basis for the modulation instability (MI) of plane waves, and the linear theory predicts the instability of any amplitude of the main waves. Finally, we focus on the MI of shallow wake flows. Results show that the MI gain function is internally related to the background wave number, disturbance wave number, background amplitude, disturbance expansion parameter, and dissipation coefficient. The area of the MI decreases as the higher-order dissipation coefficient decreases.