I just wanted to add a couple of thoughts to the thread of observation vs. imagination.
One thing that I am continuously reminded of in teaching is the vast range of
background knowledge from student to student on a subject. It is a reality
check when I announce, "Draw a fantasy amusement park" as a sketch, to find
only three kids know what kind of stuff is in an amusement park to draw.
Building an "allusionary base" is important to education. An assessable
collection of books and pictures on a verity of subject matter is an important
component to every art room in my opinion.
The second notion I would like to point out and often mention to students is
the artist Albrect Durer. Artist as scientist. Research is important. As
humans we can't memorize every single detail of every single image. I will ask
students if they know how many toe nails rhinos have. I'm not going to haul in
a rhino for everyone to check out, so what do we do? Research!
Bottom line, you need to put stuff in to take stuff out. Imagination and
creativity will blossom from the way you structure your lesson to allow for
deviation from the research.