Understanding the Microsoft MVP Program: Seeking Clear Guidance

but the actual path to nomination

It is quite simple really; you need to be nominated by either existing MVP or a Microsoft FTE. 

selection seems a bit unclear

Not even MVPs know how the selection works, you just volunteer in the community, generate positive impact and hope that you get accepted into the program and then subsequently renewed each year. 

There isn't really any information on how exactly the process works because everyone contributes differently, some lead communities, some create content, some help Microsoft with their products, some talk at conferences. You can't really compare them against each other because all are individually important.

the types of contributions that are most valued

The bigger measurable impact, the better. 

practical tips to strengthen an application

Be as specific and as detailed as possible. The more information you include, the bigger chance the decision makers understand that specific contribution better and the impact it generated.