Because they do not form the substance of your essay, do not waste too much time and space on them. It is generally best to avoid using contractions in an application essay. Unless you are writing a very informal essay, perhaps in the form of a letter or a short story, contractions are not appropriate. This will make your sentences seem more polished and elegant. I was thinking about making mine a short story or a letter.
Creative essays can indeed be very effective, but only if they are executed well.
It is very easy to write an essay that you think is funny or witty, only to find out that no one else agrees. Admissions committees certainly do appreciate some levity in an essay, however, so you might consider including a joke or a witty comment at one point. Essays in the form of letters and short stories should only be written if they suit the essay question. For instance, someone applying for graduate studies in a scientific field most likely should avoid an overly creative essay. Always remember that creative essays are difficult to write.