Spectronics, a company that focuses on Inclusive Learning Technologies, has put together this list of apps for literacy support. Not all of them are free, but they make great suggestions.
Create comic books and illustrations that include monsters and superheroes. The images and drawing tools can be used for a variety of literacy & numeracy activities as well as storytelling.
This list comes from Teacher Reboot Camp. The suggested apps provide multiple ways for students to interact with various aspects of stories: plot, characters, setting, etc.
Paperport Notes has an update that allows for OCR recognition. A paperport notes account is required for this to happen. Any picture that is snapped and pulled into a note can now be read by an ipad or even edited within the app.
This is a great article about how iPads can be used with the writing process. It highlights best practices that teachers can follow in order to best leverage the technology, and suggests apps to support the process.