If you have an Application module with onAppStart handler you should see the log output when the application starts, not when Wowza starts if that is when you were looking. Run Wowza in stand-alone mode for testing and dev (/bin/startup.bat) so you can see what is happening (stop the service first if it is running). To start the app, play (if vod) or publish (if live app) a stream for it to load and run onAppStart handler.
Also, at least as I understand the terminology, a function like onAppStart is an event handler. A callback in Wowza/Flash app is a function in one (or the other) that is called by the other, and might return data to the caller. Wowza can call Flash callback functions, and Flash can call Wowza callback functions.