A short story contest could improve ones writing skills. You will always receive feedback from professionals. A second, obvious, benefit is that you could possibly win a prize.
The story was sent for the contest. (maybe it would be better to use 'sent in'). The story was sent in for the contest.
By entering a contest that would give them to you.
That would probably be the Drue Heinz Literature Prize. It has a cash prize of $15,000 and publication by the University of Pittsburgh Press.
I just read a great mystery short story.
Yes, but it would have to be a short short story. The rules of such things are deliberately kept loose, to allow writers their artistic freedom.
characterization
The Daily Growl Contests are always changing so it would be difficult to give the answers here. Many of the contests want each person entering to come up with their own personal answer to the contest. Read through the contest rules and you can come up with a great answer for the contest!
Yes, the 'i' is a short vowel. Otherwise it would be pronounced 'High-story'
The story would have been very different.
There aren't any websites that will write your story for you, but here are some links that will help you learn how to write your own short story.
Rudyard Kipling
Those words are found in the short story "Portrait of a Lady" by Khushwant Singh.