No - really I don't know the difference between denotation and connotation.
OK. Denotation is the strict dictionary definition of a word. Connotation are associations that connect themselves to words but are not strictly speaking what the word means.
For example: the denotation of "native" is "one born in the country they live in". During the colonial era, British administrators quite correctly referred to the indigenous peoples in Africa, India and other territories they governed as "natives". But this gave the word the connotation of "not-British". (Also it acquired other racist and negative meanings.) As a result, if you refer to an Englishman as a "native" he is likely to take offence, even if your meaning is that he is native to (=born in) England.
I often have the impression that those who hold it important to stick with a literal reading of scripture do so, not because of the dictionary meaning of "literal"--which is simply the plainest, most common meaning of the terms--but because they have invested both "literal" and "figurative" "metaphorical" "allegorical" etc. with additional connotations that are not, strictly speaking, part of the definition of the word.
So, for example, as used by many people, "literal" doesn't just mean "simple, obvious meaning". It means "real" "factual" "historical" "empirically factual" etc. And by contrast "figurative" means at best "fiction" and at worst "not true".
In part, this is not just a religious issue. The roots of this way of thinking lie in the rationalism of the Enlightenment and the rise of modern science and the scientific method.
Now there can be no doubt that scientific method has been spectacularly successful in winkling out empirically verifiable information about the natural world. But this has become linked to philosophies of scientism, logical positivism and such that go on to assert that scientific method is the only method for verifying any truth whatsoever. This thinking asserts that all truth must be empirical truth verified by empirical methods.
To the extent that Christians have succumbed to this view, they have concluded that biblical truth must also be subjected to the criteria of empirically verifiable truth. And this becomes what is meant by "literal" instead of the original definition which merely referred to the plain, common meaning.
It is a bit ironic, because it leads modern Christians who accept this view into theological stances that are quite the opposite of the biblical writers, the Church Fathers and the medieval theologians.
Almost all of these would have downplayed empirical verification as of little importance when dealing with spiritual truth. It is not the outward physical meaning of a text which is necessarily the only or most important meaning, but rather those spiritual meanings which, by definition, cannot be empirically verified. A good example of this is the fact that for more than 2,000 years the phrase "image of God" in Genesis 1 has been associated with anything but the physical human form. Most commentaries prior to 50 years ago (and possibly more recently) explicitly denied the identification of human bodily form with the image of God. Yet recently, anti-evolution arguments have included the notion that God would not have used evolution to develop a physical form which is the image of God.
The letters are symbols that compose words that have literal meaning,
Sometimes people on all sides of the controversies forget that words always have literal meanings. Furthermore, figurative language is always an elaboration of literal meanings.
The real issue is not whether a text is literal or not (all texts have a literal sense) but whether the literal sense is the relevant meaning in this context. For language itself, as you point out, is fundamentally symbolic. We use sounds and squiggles on paper (or whatever) to symbolize the meanings we wish to communicate.
But the symbolic nature of language also lends itself to going beyond the literal meaning of a text to develop ways to communicate about things that are not readily verifiable empirically. We take words that have concrete, empirical meanings and invest them with idealistic, symbolic meanings. There is nothing wrong with this. In fact, if spiritual nature is as real (perhaps even more real--as some say) than physical nature, symbolic language is both necessary to describe it and just as true as empirically verifiable observations are.
I think this is part of what you mean when you link "literal" with "experiential". You are saying your spiritual experiences are just as real as your bodily sensations.
I would agree with that sentiment. But I would caution against using the word "literal" in this way. That is adding a connotation to the word "literal" that contributes to the rampant confusion about what is meant when we speak of reading a text literally.
...... and these are all wonderful mysteries.
And mysteries are the occasion for symbolic language. They transcend the plain, obvious meaning of words.
That is why we should not fix on "real" as a meaning of "literal". Nor should we think of figurative language as denying the reality of which it speaks.