Let me tell you something about radioactive fallout: You don't just 'clean it up.' The Chernobyl disaster of 1986, here in the real world, has poisoned the land for years. Select portions of the region affected by the incident were only marked as safe for settlement in 2005, almost 20 years later. That was only a small portion of the affected region. There are still areas of the land that will be uninhabitable for hundreds of years. There's actually a belief that the worst of the Chernobyl disaster hasn't even happened yet. Nature is taking the area back, and that's not a good thing. The plantlife is pulling the radiation back up out of the ground in some places, and making the radiation more dangerous than it was a few years ago. There are places where it's going to get worse before it gets better, for years to come.
Leper Gnomes didn't become lepers because it was in fashion. It's radiation poisoning. Not necessarily true-to-life radiation poisoning, but still radiation poisoning. Why can we adventurers go in, kill some lepers, then go home fine? Radiation like you'd find in a fallout zone like Gnomeregan or Chernobyl probably won't hurt you years later if you're only there for a few minutes, or even hours. It becomes a problem when you're living in it. That's why you see so many pictures taken within Chernobyl, but almost nobody lives in those dangerous areas. Outskirts? Sure. No problem. Where the land is still dangerous? No way can you live there. You can pass through if you're careful and take precautions, but you can't be there very long.
The Gnomes could clean out the lepers and the troggs, but they still couldn't live there. Sure, some things are different in a world of magic and sorcery and all of that sort of thing, but they're still not going to just be able to take a soap and sponge to Gnomeregan and 'clean it up' or anything like that. Even in a world of magic, I suspect making Gnomeregan inhabitable would be an incredible undertaking.
"Now that Malygos is dead, what becomes of the Blue Dragon Flight? Are the remaining blues to be hunted down, left alone, or will a new leader take the reins of the flight?"
We have no solid information as to what will happen, but it's very likely that a less-crazy Blue Dragon will fill the void in leadership left behind my Malygos's demise. Nozdormu, aspect of the Bronze, picked an heir to his 'throne' since he knows well in advance that he will die one day. Since he was able to assign an heir, I suppose the capacity is there for the rest of the Dragonflights to do so as well. If Malygos didn't pick an heir himself, the Flight will probably pick someone in his absence. If the new leader is as much of a bastard as the last one, it might be the end of the Blue Dragons. If the new leader is a good guy/gal? Great!