"Mutual explanatories" and "Phonetic loans" are not ways of creating new characters, but ways of using existing ones. Because of them, the system of Chinese characters became more colourful, while the original meanings of some characters are fading away from people's memory.
* Mutual Explanatories
It's the most dubious concept in this theory. Generally speaking, mutual explanatories are those which share the same radical, mean the same and are mutually explainable. No new characters were created in this way today.
* Phonetic Loans
It's characters which are used in a new sense on account of its pronunciation---borrowing on the basis of pronunciation. In this way, an existing character could get a new meaning, but no new character is created.
At first, the number of characters was limited, but many concepts had to be expressed. So many pictographs were borrowed in this way. However, their original meaning were discarded gradually.
The 4 characters standing for directions were also used in this way
Their original meanings are:
East: A bag tied by strings.
West: Nest of bird.
South: Hanging things.
North: Two person walking in opposite directions.