I'm getting a little confused about pronouns, but I'll answer what I think you mean and you tell me if I get it wrong.
When deciding where to go, my Chosen has the option to go to a world they invented on the spot. This doesn't generally involve creating that world for the purpose of going there; reality is big enough that it's possible to match most combinations of details to a world that already exists somewhere out there.
The Spirit sees the world in terms of narrative and drama, and the powers it offers and the experiences its Chosen have follow narrative and metanarrative patterns, but this isn't quite the same thing as this being what reality is made of. I don't know whether we're in a story right now. We're real people either way.
When it comes down to a competition between the Spirit and any local universe's laws, the Spirit is typically stronger.
The Spirit can make its Chosen arbitrarily good at things, yes. It only does so if that fits with the powers its Chosen has picked out.
Whether your sibling ascends to godhood specifically is dependent on their personal choices. In many ways they will be more powerful than a god.
The flow of time matters for your ability to coherently perceive things and have thoughts in the manner you are accustomed to, and it matters because without it many good stories couldn't happen.
There is only a weak veil keeping people in your world from noticing that magic exists, because before my arrival there was no magic to be found here.
Unless Zachary takes There's Another One, they will be the only "notebook girl" they'll ever meet.