You are correct that KiCAD is intended primarily for printed circuit board layout, with a secondary purpose of creating documentation that is consistent with typical manufacturing processes.
Your question is much more fundamental than that. Of all the things we know of in the universe, people have two unique abilities. We have an ability to comprehend, understand, and communicate how things in the universe work and interact with each other. We call this "science". We also have a unique ability to assemble things and ideas in original ways, which we call "creativity", or "art". Engineers sit at the intersection of art and science, combining the objects and principles of the universe in new ways, so that they behave in exactly the way that we intend. At its core, your question asks, "How do people create?".
As each person is unique, so our creative processes differ. I doubt that anybody could retrace my steps through my current project. There is, of course, the accumulated experience of over half a century "doing electronics" in paid positions - and another 6 or 7 years prior to that, dabbling out of curiosity. Artifacts of the current project include a digital "folder" containing some 15 - 20 documents - magazine articles, two scholarly papers, data sheets, copies of posts from Forums similar to this one, etc. There's also a manila file folder holding a few dozen sheets. Many of them were duplicated from the electronic documents, but now contain hand-written circles, arrows, cryptic comments and a few calculations. About a dozen sheets were torn from engineering quadruled pads. They show sketches of bits of circuitry and my efforts to emulate that legendary constipated mathematician who worked out his problem with pencil and paper. There are also two manual sketches showing construction and pinout of interconnecting cables. And two pages covered with measurement data, from tests that were never properly documented and will probably never be repeated.
In the digital Project Directory there are four sets of LTSpice simulations, dealing with various aspects of the circuit's behavior. And a subfolder holding a handful of photographs, showing construction of proof-of-concept models, done on Vectorboard. (The one I shoe-horned into an Altoids tin gets the most comments.) This project involves two separate hardware units; one is on its third revision of schematic and PC board, the other on its sixth.
The schematic is one way - in many cases, the primary way - for the circuit designer to express his intentions to others. (And communicate to himself, at a future time.) In an environment that is rigidly oriented toward manufacturing, every component represented on the schematic will be installed on the PC board, and every electrical component on the board will appear on the schematic. That means the schematic ends at the pin header. KiCAD assumes an environment like this. If this system is followed rigorously you will have to look at the drawing of the next-higher assembly to discover that the pin header on your board connects to pots, switches, LED indicators, etc.
In a less rigorous, "hobbyist" environment, the designer may include the pots, switches, etc, on the main schematic to better present his concept for the overall design. You, as designer, have some freedom to decide how to best communicate your design ideas and considering the intended audience of your explanation is part of the communication process. Regardless of which method you favor, somebody from the other audience will criticize your choice.
(The composer, performer, and counter-culture icon Frank Zappa received a lot of criticism for using "bad" words and images. He countered with a statement to the effect that if the words and images effectively conveyed the idea he was trying to express, they were NOT "bad". Perhaps somebody else is better at locating that quote than I have been.)
Here's how I approached this problem in my current project:
I drafted symbols that incorporated a symbol for a mated pin-header, along with the off-board item that is connected to the header, and explained them with an unnumbered note in the field of the drawing. (The phrase, ". . . circles and arrows and a paragraph . . . " has special meaning to my generation.) The footprint associated with each of these symbols is just the footprint for a 2-pin header. Does this violate some drawing standards? Undoubtedly - I can name at least half a dozen of my previous employers where the folks in Configuration Control would tell my boss to write me up for this. Does it effectively communicate my design intent? We shall see . . .