Think of the MSHSL and Sections similar to the Federal gov't and the States. The Fed (MSHSL) gets to have final authority when it wants to but routinely lets the States (Sections) decide how best they want to handle things. When push comes to shove the Fed (MSHSL) gets involved. Otherwise they let them do their thing.
The poster who said the MSHSL doesn't try to get the best teams to the state tournament is correct. Right or wrong, the MSHSL is about participation, not about who is the best. Yes, I know that stands at odds with having a tournament to produce a winner.
A common, but not universal way of doing it is where the coaches propose changes to the Region Secretary, the Secretary will get feedback on the proposal and take it to the AD's. The AD's are the ones who generally have the decision making (voting) authority on how the section tournament will be run. That is usually where it ends. If things still aren't going well there is a Region Committee made up of school Administrators that can make the ultimate decisions. The Region Committee is a Board of Directors.
Different Regions have different views on how to go about things. Should it be about providing the best experience and most opportunities or is it about money? For most, it's a combination. They need a couple sports to be profitable in order to support the non-revenue producing activities. The Region is a legal non-profit entity that is only allowed to keep a certain amount of money from year-to-year. This is for their operating expenses going forward. What it boils down to is that each Region needs to turn a profit each year. If not, the schools would have to kick in. If there is excess, the schools get money sent back to them.
To confuse things more, Regions and Sections are not the same thing. Administratively, schools are in a Region. The poster who said there are 16 in the state was correct. Because different sports have different classes they are placed in Sections based on sport and size. There is a considerable amount of overlap where a school could have teams in multiple different Regions (only one per sport). This is why on occasion you will see a boys bball team in one section and girls bball team in a different section. It's rare but has happened. Each of those Sections could be in a different Region administratively.
Sorry for the long winded answer but the system is far more complicated than most people realize.