Hi raghurajappa
I would like to use Simulink on one PC to generate code (and HEX file) and another PC somewhere else to flash this hex file to the microcontroller. But from what you explain, it looks like Simulink will not generate hex file without the hardware connected. Is this true?
This use-case it is perfectly supported by the Simulink. You can have the MATLAB/Simulink + NXP Toolbox on one computer and generate all the C/H/makefile/elf/mot files into a folder called ***_rtw that is placed in the current MATLAB path.
Inside this folder you can find all the generated files.

In my folder structures also I could not locate any hex files that I could use separately in my IDE. I did this as an alternative where I can use Simulink to generate hex files, then take these hex files into the CodeWarrior IDE (or FreeMaster) and use JTAG to program these. But I could not find the hex files.
By default the toolbox is configured to generate the *.elf and *.mot files

ELF is the standard DWARF format file that can be used in any IDE. You can use this file to load the application in the MCU with the available Debugger (that is DWARF compliant) via JTAG.
The hex file is special format that could be generated (by default the toolbox generates the mot file format) via 2 different approaches:
#1: starting from ELF you could use jfrey suggestion as here: https://community.nxp.com/thread/452609#comment-910812
#2: you could modify the toolbox makefiles to generate hex instead of mot as per paulvlase suggestion: https://community.nxp.com/thread/452609#comment-912694
Hope this helps!
Best regards,
Daniel