Okay, this might sound like a silly question, but when you're creating a VN, is it better to thoroughly flesh out the story before doing the artwork or just outline the story and flesh it out while doing the artwork simultaneously?
First you write at least the key points of the whole story.
Ideally you should write the whole story, from A to Z, but since you ask the question I assume that you aren't familiar with writing, so it's better to let some freedom to your imagination.
But the key points are important, because they are what will drive the story, and also what will keep your imagination on the right track. Knowing them you'll not suddenly pass from a story to another mid-game, and you'll also be able to anticipate what will happen. The last point being important, because nothing happen by hazard, so the player should at least understand that something is coming soon.
A story should always anticipate what will happen next, and for this you need to know what will happen next.
A least you should have something like this :
Who the MC is, what he's doing, what is his goal in the story, and how he will achieve it
[for each character] Who is this character, what (s)he is doing, what is her/his goal in the story, how (s)he will try to achieve it, and how it interfere with MC's actions.
Then you describe all the main interaction that will change the story, ideally with a quick summary of the dialogs and quick description of the scene and context.
Something that could looks like :
- MC awake and go to school. Before he arrive, he witness a woman that act strangely. Being a little early, he decide to follow her. She then stop in front of a private club entrance, and after the door open, she open her coat wide, like if she needed to pass an inspection before being authorized to enter. It was a quick glance, but there's no doubt for MC, the woman was naked under her coat, only wearing some kind of harness, with few things apparently wrote on her skin. Because he'll be late, MC rush to school.
- One week that MC witnessed this strange scene, and he can't get ride of it, daydreaming about what he show each time he can. Today he awaken early, and waited where he first saw the woman. After few time that seemed like an eternity, the woman is back. Following her, he end near to the same club entrance, witnessing the same scene before she enter. This time she wear a panty... and nothing else. He's not sure, but it seem that she have some clips on her breasts, and not just on her nipples. MC decision his made, he want to know more, to enter this club... Not a problem if he can't have this woman, he'll have his own ones soon or later.
And so on, step by step. So, the next key point is probably the MC skipping class the next week, waiting in front of the club in order to follow the woman when she'll go back at home.
Then he'll try to befriend her, to know more about the club. Will come, after few other key points, the moment he have the right to enter, some initiation phase.
After this, probably his hunt for his first pet, why not this shy girl he really like in his class. There were always something odd with her shyness [note: It's part of the anticipation I talk about above. This girl must be shown in the background or in secondary scenes before she's fully introduced, and what the player will see at those time should imply the oddity of her shyness]. MC don't know for sure, but now that he have access to the club, that he'd witnessed many submissive girls, he found some likeness between his classmate and them. It's decided, she'll be his first pet.
And so on.
Secondly you write, with all details, the scene you're working on.
It's the effective writing, so by default everything should be present. Do this with in mind the conviction that it's what the payer will have in the game.
You need this step before you works on the art, because without it you wouldn't know what art you'll need. You have an idea of the scene, but there's always a difference between the idea you have, and what you'll end with. By example, a dialog flow can work in your head, and feel totally weird once you have it in front of you. And, like it's easier and faster to correct some words, than correct the art, it's what you need to do first.
Thirdly you create the art that goes with the scene you wrote.
You know know the whole action, including the expression that each involved character will have, as well as what feeling the art have to carry in order to complete the words you wrote. Therefore, you can now create the art that will fit the scene as you wrote it.
Fourthly, and finally, you go back and forth between the writing and the art.
As you implied, creating the art can give you some idea, and it can also make you change your mind on this or that. Therefore, once you've the art, you adjust the writing to fit the small change implied by the art you finally created. What will perhaps give you a better idea for the art, that you'll then adjust, and so on until the scene is finished.