Think of Inspiration as the crafting equivalent of experience points for your character. Actions you perform gain either ISP or XP. One levels crafts, the other levels your character.
Wait, what? No.
It's possible to max crafts from 1-50 at an extremely low level. If this were the case, inspiration-exp conversion would cause you to level up, but that simply doesn't happen.
Inspiration is the crafting level version of experience points. Nothing more, nothing less.