Hello Crescat Scientia. Unfortunately, in today's publishing industry, agents and publishers are looking for what is called a built in audience or "platform". Without a platform, it is increasingly difficult to get published in the traditional publishing industry, and impossible to market a successful self published book.
I understand your concerns about spending time on the wrong thing, building an audience and not working on the book. I actually spend an average of 3 hours a day writing my novel, and an average of 3 hours a week doing other things like working on my blog and thinking of various ways to build my audience.
One thing I've done which has been very successful is book readings and literary open mic nights where I'll bring an excerpt of my novel and receive a great response.
In any case, one doesn't need a book to make an interesting blog, but if you are in my position where I have an established and fairly popular blog (not massive, but respectable), you might as well use it to talk about your novel. But I want to do more than just talk about it. I want to actively engage people, I want them to have fun, I want to help spark their imaginations and I want to share my thoughts and hear the thoughts of my readers, and this competition is just one of many steps I am taking into that direction.
As for the book cover, its intention is simply to have a visual to go along with this project, so that when people come to my site there is more than just a string of words, there is something to connect and share.