Interesting. I have not read "On Writing", but I will do so now I know about it.
I love a lot of Steven King's stuff. What he does is exactly what you describe. Take small component ideas and embellish them. Albeit with great creativity.
But, I really feel what you are describing is just one form of "creativity". Taking another example we can both relate to to illustrate your argument again: Apple, it's GUI and Xerox. Certainly Apple took a great idea, ran with it "creatively" and embellished it.
That is a form of connecting dots, or connecting existing ideas as you say.
But when we look at other forms of art, then creativity is about original thinking, or simply being "out there". Byron for example? Dali? This kind of "talent" or "creativity" not even necessarily recognised universally as talent initially. Quite often, not until many years later. Typically it comes from creative processes linked to the persons own individual psyche. And also quite often enhanced or embellished by drug use.
It's been said that there are only really a finite amount of stories in the world. I can't remember the exact number, but it's something like 4. And any story ever written is just another version of a "Love Story", or another genre.
So in that sense, yes a lot of creative work is derived. But where did those initial stories / ideas come from?
The truly rare and talented original thinkers are artists more than ideas people, and I don't think they are necessarily taught. It's in their genes. And there ideas come from their own emotions, ideas and observations. I guess you could argue that the things they see, and are influenced by, are those ideas that they derive things from, but that is taking it a little too far.
I'd include someone like Einstein in that category. He both derived ideas, and also came up with concepts no-one had ever though of before. I don't think being a scientist precludes you from being an artist either for that matter.
Leonardo is another example. Scientist, or artist? But certainly original thinker.
In the second quote you disagree with you seem to misunderstand my point. I am saying that you can't teach the kind of creativity I am talking about. Whereas you can teach someone to do your kind of creativity IMO.
