What you're looking for is something called "Lateral Thinking" [1]. Using one's prefrontal cortex "silences" their inner genius and prevents "Ah ha!" moments. This is why people get breakthrough ideas in the shower, going to the bathroom, or driving. The "step-by-step" executive planning part of the brain is not engaged in these moments.
John Cleese has given talks throughout the years about how to be creative, and they're very good. [2]
The Programmer's Stone is also a good source of information about this topic. Instead of "lateral thinking", the authors refer to "mapping" and "packing". Packing is when you're in "step-by-step" mode. When programmers refer to "being in the flow", they're probably referring to the state of mapping or lateral thinking. [3]
I agree this is probably what was meant by "imaginative" in the original question. But, it doesn't directly address the core question of causality: does practicality limit imagination and lateral thinking? I think the answer is, "no". Practicality is largely in the domain of decisions and behavior. In contrast, imagination is in the domain of thought and speculation.
To not allow your imagination to run ahead of or independently of your behavior, to not allow yourself any mental play, is to be unimaginative. That's tautological. If you truly find yourself unable to imagine any outrageous ideas, you have to look elsewhere than pragmatism if seeking a cure. You need to rediscover how to play. In your head. Pragmatism is a filter to decide when to put some of your play ideas into practice, not a filter for thought itself.
There are different challenges someone else might face, requiring different analysis. What if you are able to come up with outrageous and lateral ideas, but are afraid to voice them? Or you are unable to ground the ideas in any kind of reality, i.e. pure fantasy rather than plausible-if-ridiculous? Or do you find challenges in the social environment of getting any air time for your ideas among your peers...?
I loved Cleese's talk and I wonder if there's the inverse of it somewhere? On the opposite side of the spectrum are those of us who make all sorts of wonderful connections but have difficulty putting A next to B next to C.
Perhaps it's Elon Musk's chats on thinking in first principles, but I'd love if anyone knows some introductions to linear, tight-knit, strategic thinking.
Edit: I also wonder if books on clarity in writing like Zissner's "On Writing Well" qualifies here. Writing is linear and the practice of it presumably should help the writer think more clearly.
+1 to that. Creative solutions come when you apply a working pattern to an unexpected subject. You need both knowing multiple fields and experience crossing ideas.
John Cleese has given talks throughout the years about how to be creative, and they're very good. [2]
The Programmer's Stone is also a good source of information about this topic. Instead of "lateral thinking", the authors refer to "mapping" and "packing". Packing is when you're in "step-by-step" mode. When programmers refer to "being in the flow", they're probably referring to the state of mapping or lateral thinking. [3]
[1] https://en.wikipedia.org/wiki/Lateral_thinking
[2] https://www.youtube.com/watch?v=y70nbDJI5Uk
[3] http://programmersstone.com/