Very good post, Jack.
One very important thing that I do whenever coming up with a lore behind something is try to imagine every little detail that I can. I visualize these things, And while I don't always give clear mention to these things, Them being there gives more depth to the story. Especially if someone asks you about something and you can immediately give a clear answer to them.
Another thing that could be touched on. While believability is important in a story, Things that don't make sense make great plot points and can be great for inspiration. Why are they like that? What is going on?
If you are focusing on something related to deterioration of the mind, That exact kind of thing makes it all the more enjoyable to read.
One other thing that I'd like to see touched on is the actual process of writing the story. Because that is honestly the most difficult part for me personally. I can make really intricate stories in my head, But I'm kinda meh at writing them out.
Despite the title, This guide only mentions the creative process and the creation of story. None of the actual writing.