So I'm going to discuss some of the structures Blizzard has in place to work with their external authors as well as my personal creative process. Please note that this is only the way I have experienced things, and Blizzard's longer-standing authors such as Richard Knaak or Christie Golden may have a very different routine.
Working with Blizzard
In my experience, an outside author really does not have any control over what stories get told. Once upon a time Blizzard did ask me to pitch them some ideas, but ended up scrapping them in favor of the leader stories project. I am really not in a position to suggest I write something for them. If they want me for a project, they'll contact me and ask if I'm interested.
Once I have verbally accepted an offer, contracts are mailed and signed, and I head off to Irvine for a meeting with the Blizzard Publishing team, which is the primary point of contact for authors working on expanded universe content.