Too literal translations fall into the pit of confusion quite easily. Because idioms from one language must not be translated word for word, but interpreted.
For example "he slept with his fathers" or "gird up your loins" or "left hand of Damascus" or "my horn is exalted" are meaningless if not explained.
Or an extra-biblical example: In my language, we say "máš kliku", which, if translated literally, means "you have a handle". But it actually means "you are lucky". And this would be the correct translation.
That’s true, but most literal translations are not entirely literal but make some accomodations for changes in idiom between languages, just not to the extent of Dynamic Equivalence translations. For that matter, the best Dynamic Equivalence and the best Word for Word translations are not greatly different; a comparison of the NIV and the NKJV and the NASB and the ESV does not turn up anything particularly shocking.
One class of translation that can lead to confusion if used incorrectly, because they are in many cases hyper-literal, are interlinear translations.
However, you have touched on a major issue that affects all translations, for example, it is debatable how best to handle complex Greek words such as Logos, Prosopon, Anamnesis and so on, and many of the most popular translations of the New Testament make translation choices with regards to these words that I find frustrating, for example, translating Anamnesis as “Remembrance” rather than as something like “Recapitulation” (it literally means “put yourself in this moment” and if read literally does not support the Memorialist approach to sacramental theology). Also, the choice of most translations to translate Kohanim and Hierus as Priest, whch is an Anglicization of Presbyter, a Latinization of the Greek word Presbuteros meaning Elder, the specific title given to Christian clergy, but never used with respect to the Aaronic Kohanim of ancient Judaism, or the Sacerdotal, Hieratic Royalty of all believers, or the officiants of Pagan religions such as the Pontifex (Bridge Builder) of the ancient Roman civil religion, or the Mobed (Magi), hereditary hierarchs of the Zoroastrian religion equivalent to the Pandits (Brahmins) of Hinduism, or the Hierus of the Hellenic religion, were not Presbyters. Specifically, they were sacerdotal, and all Christians have a sacerdotal relationship with God in that we can pray directly without relying on a sacerdos, except insofar as we have an advocate and intermediary in the form of Jesus Christ (who is also our judge, which is good for us, since our advocate will sit in judgement of us on the dread day of judgement when all will be revealed, but we should still approach the Day of Judgement with an attitude of repentence of our sins, who is the equivalent to the Kohen Gadol of the descendents of Aaron, albeit of the higher order of Melchizedek, as explained in Hebrews (which does not mean we are required to pray alone without seeking the intercession of others).