Rinus Michels was indeed the manager of the Netherlands for the FIFA World Cup in 1974, where they lost the final versus Germany.
I have not been able to find any exact reference on why Michels was not the coach prior to the tournament, but here comes my reasoning:
Checking his career path I found out that he was the coach of Futbol Club Barcelona from 1971 to 1975. This probably means that he was not allowed to serve as national team coach at the same time of being Barcelona's coach, but allowed as soon as the season was over. Since La Liga finished on May 20, 1974 and the 1974 FIFA World Cup started on June 13, it would make sense.
I also found out in the Dutch article on the FIFA 1974 World Championship Wereldkampioenschap voetbal 1974 → Groep 3:
Eindelijk plaatste Nederland zich voor een wereldkampioenschap, de grote generatie van Ajax en Feyenoord kon zich eindelijk manifesteren tegen de grote landen. De KNVB had weinig vertrouwen in coach Fadrhonc en besloot de succescoach van Ajax en FC Barcelona Rinus Michels als supervisor aan te stellen. In de oefencampagne liep het allemaal totaal niet en de verwachtingen waren laag.
Which Google translates as:
Netherlands finally qualified for a world championship, the great generation of Ajax and Feyenoord could manifest itself at last against the big countries. The KNVB had to appoint little confidence in coach Fadrhonc and decided the success of Ajax and FC Barcelona coach Rinus Michels as a supervisor. The training campaign was all totally and expectations were low.
In relation with the credit for the formation of that historic "Orange Clockwork", I do think that this is due to the fact that the underlying style was set up a bit before by Ajax with Johan Cruyff, which had Michel itself as a coach in its golden years 1965-1971. As Wikipedia says:
While at Ajax, Michels modernized the game by introducing what became known as "Total Football" and using the Offside trap
All together, it looks like he was kind of assigned the honor to be the coach in the World Cup for being the one who had defined the style of playing with the same players that helped him to do it.