As for how to attack, it depends on how open they are. It's hard to explain what goes through my head.
It's more of something that you feel than anything.
We only do sparring every once in a while in my dojo. It is, however, a part of the shodan test.
I think sparring done properly is an excellent tool. I would be very leary of anyone who claims a high level who hasn't actually gone and had to 'make it work' in some situation or another. You learn very quickly that just waiting, backing up, or trying to grab fails horribly. (I think that more training in sparring would be a big help to people who just say ma-ai or back up to everything)
If you don't learn how to attack, I don't think you can learn to defend.