Do you think that our war ravaged society has leisure activities that we do not see evidence of in game (sports, music, art,etc)

Would anyone in an RP community say 'no'?  :)

In terms of player-created ideas, I'd say the University of Kalimdor is an example of "Yes - organised and well funded" (I'm sure the Uni teaches recreational courses as well as serious academics!).   So would be the art gallery/museum of Silvermoon which has cropped up a couple of times (Szeharia's portraits, for example, are not exhibited just ANYWHERE you know!).  To mention Szeharia again, there is apparently a movie industry.  There are a number of small newspapers (the Daily Piccolo, the Swiftstride Sentinel) that crop up on Haven occasionally.  I'd say these are probably 'individual/small funding'.  There is the Drunken Fishball thing too  :)  Assorted bard-like types as well.

Or......do you mean provided by Blizz for us?  There's the Tauren Chieftens for a start.  The Opera in Karazhan surely has a 'Company' behind it...... And there are so many books in-game (such as the Steamy Romance Novel) that I think there must be something more mechanised than individual scribes working away these days  :)

I'm sure there are dozens of examples that have slipped my fragile mind.......

I've been thinking a lot about music in WoW lately. Technically it does exist, but its very fringe. We have the rock band The Tauren Chieftans that plays in Silvermoon, BRD, and Shattrath. Our Inns and Taverns often have music playing; although one could easily debate that game sound effects =/= roleplay fodder. Tauren's have drums scattered all over their camps and even strapped to their kodo mounts. There are a few musical instrument items such as leatherworking war drums and the flute. We do not, however, have a Bard class, I can think of very few quests/races that feature musical instruments in any prominent way. We also cannot learn instruments as a profession. In many ways, music is a very "grey area" in World of Warcraft where it isn't in other games such as Everquest and LOTRO. 

There's also the matter of sports. Every society in RL history I can think of, no matter how war ravaged, had sports - yet we have absolutely no in-game mention of them that I can recall (besides fishing). We do have some in-game items, such as the leather ball. This server famously had a player invent a sport called Drunken Fishball that many of the "old school" players might remember, but thats really the only organized sport Ive ever considered to exist.

Art quite obviously exists, as there are paintings and sculptures all over the place. Yet again, its not a learnable profession and there aren't any actual items I can think of that we can use to create art, nor any NPC's that are labeled as artists. No lore speaks of any prominent artists.

Many role-playish things to think about and chew on. But basically these are my reasons for believing that they do exist, but not in any organized way and are often "fringe" activities that an individual can do on their own, but could explain why [So-and-So] player RPs that [insert sport here] is well known to them, but [So-and-So] other player has never heard of it.

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I would suggest that the Azerothian arts are probably well funded; perhaps not at this precise point in game history with wars being fought on all fronts imaginable, but in general, yes. Given the profusion of books lying about, there has to be some sort of publishing industry - not merely a printing press, but an industry; novels, for example, were orginally sold simply as sheets of pages, and it was up to the reader to have them bound; nor were novels cheap - yet books are everywhere. Azeroth seems to be an intensely literate world. Do we encounter any npcs we know to be illiterate?

Let's not forget architecture, either, especially elven architecture. Purely functional? Knowing that Silvermoon was just rebuilt suggests that there was a lot of money, power, & influence behind the reconstruction. I would suspect that the sin'dorei are the playable race most strongly interested in the arts; they certainly are interested in beauty & have a definate sense of aesthetics, are certainly interested in leisure (even Kael's sin'dorei out in Netherstorm have their tents, their cushions, their smoking paraphernalia, &c). For luxury to be so pervasive as it is in Silvermoon, there has to be an industry behind it (and consider: the city has not one, but two auction houses).

I doubt Silvermoon really has a film industry, but it ought to be possible given goblin technology; hence Lady Everbloom's claims that motion pictures are so avant garde.