I think there might be a difficulty here with communication; let me see if I can answer your questions as I've interpreted them.
By my first question, I meant does the staff consider whether the user is being ignored when they make decisions about pending approvals (for the unapproved, NING, or staff positions). Does someone being ignored play a factor in their decision to approve changes in member group?
Not unless someone specifically tells us there is a problem with the member, and then we look at it case by case. We're not mind-readers, and code doesn't allow us to check "Hey, is this person already on an ignore list?" - usually it's not needed. Members are welcomed to PM staff and/or Mentors if they have input on a new applicant.
Similarly, this isn't taken into account with NING members unless it's brought to our attention. You'd have to report it the old-fashioned way.
As for the second, I am still able to see the posts of those I have ignored. I don't mind ignoring them the old fashioned way, but I'd rather it be automated. I've added to the ignore list, but I can still read the posts. Am I doing it wrong somehow?
You currently have your settings such that people whom you've ignored can still PM you, and it's possible that the forum's code allows you to see the posts as well. If you go into your profile and go to personal message options, it will say something like "Who can PM me" followed by a dropdown. Right now, you have that dropdown set to "all users". Change it to "everyone except those on my ignore list" and see if that fixes things.
If not, you'll have to post or send screenshots, so we can help you better.