the story about muhammad ascending to heaven in jerusalem is one of those stories. if we agree that we can write the idea of a literal telling of history off a priori (that is, we don't need any evidence to discount the idea, and we should begin with the obvious fact that, no, muhammad didn't ascend into heaven and talk to god, or at least not outside of a hallucinogenic trip, because that's completely absurd), we're left with two possibilities:
1) they made it up (either via some syncretic mechanism, or out of whole cloth) to justify some other thing, like the arab conquests. this is a kind of null hypothesis, and i will retreat to it most of the time. so, you had these arab warlords that conquered this greco-christian swath of land (along with this perso-zoroastrian swath of land) and needed some way to organize it. therefore, islam - sort of like how constantine pushed christianity down from the top to unify the empire. but, this is essentially a conspiracy theory...
2) mohammad was abducted by aliens and his primitive mind called those aliens god. maybe they even gave him a mission to end the roman-persian wars. this allows you to retreat from the conspiracy theory and actually hold to a naturalistic explanation.....even if you still need the syncretism for the winged horse, cryptozoology and dna splicing aside. i mean, it's possible to take a head from a human and a body from a horse and put them together (even an ancient doctor could do that), and maybe you don't know better if you're a trafalmadorian, right? you'd have to decapitate us to understand how we work - that's as an empirical question for hypothetical aliens as it was for us thousands of years ago.
now, what is option 2?
is it an appeal to the paranormal? an invocation of the supernatural?
i don't think it is. at all. and, in the end, we might find out it's right - that mohummad didn't make the whole thing up, so much as he was overwhelmed by an alien species.
and, why was he chosen?
i dunno.
maybe they liked his hair.