I'd like to buy my nephew a game for Christmas. When I went to order, it asked me for an email address. What, exactly, happens when I do this? Is a code sent to that email address? Does a new account need to be setup specifically USING that address? I obviously don't want to order the game now and have it go directly to his address. The ideal would be to pay for it, get a redeemable code, and them give him the code for Christmas. I even had the idea of making him a little Minecraft style chest (because he wants Minecraft Story Edition) to wrap up, with a piece of paper with the code on it inside.

Like wpegg said, just type in your own email address.
The email in this case is inconsequential, and you can find the code immediately after purchase in your own account, under "ORDERS & SETTINGS". Just copy it, print it out and give it to your nephew.

Wonderful! That's just what I was hoping for. Thanks guys. I get to be the cool uncle this Christmas. w00t!

Thats exactly what I do. I gift to my own e-mail and then give the code to person i want to.