There are a couple of really good lectures on these subjects from The Teaching Company, and they all concur with this understanding of the past. One of these is Ancient Near East Mythology by Shalom S. Goldman. In those lectures he said:
"Now, the gods in those creation stories [speaking here of the Egyptian creation stories] appear in multiple and conflicting accounts. There is no attempt at consistency either within any given account or across accounts."
He then goes on to compare this with the similar contradiction between the two Hebrew creation accounts. Then, later:
"Among the Hittites and among the Caananites, in those cultures, there are mulitple and sometimes conflicting accounts [of creation]. There is no attempt at consistency and no claim to consistency."
And, yet, these ancients still believed these stories, and told them all even though they conflicted. They were still "real" in a very important sense even though they realized these various accounts could not all be strictly historically accurate. Those factual inconsistencies didn't seem to bother them in the least.
Another of these professors, Robert Oden, from Harvard, now President of Carelton College, wrote me back from an email on this very issue. After agreeing entirely with the description of ancient thought I described above, he said.
"I do think that the kind of facticity we seek to find in history was not what many ancients were after. The parade examples come from ancient Egypt, and I was standing before one such example deep beneath a pyramid only last week * where several "historical" events, all triumphant, were attributed to a certain pharaoh, and where the same events were also attributed to other pharaoh both centuries earlier and centuries later. Either a remarkable number of Egypt's enemies died in remarkably identical fashion during remarkably identical battles, or they conceived of history as being and doing something other than what it does and is for us. And I also completely, agree, as it happens, with your reading of Genesis."
And another, in response to an email question on this very issue (my question first, his response in black":
"My studies of ancient neareastern cultures and their creation stories (my now distant BA in history, and some more recent lecture series from the Teaching Company) has taught me that they simply didn't view the stories about their past as we do with our modern, emperical minds. I don't think they would have viewed those stories as literal history, but would still have thought of them as "true" or "real" in a way that is difficult for us to "get our heads around". *****Yes, exactly."
And another:
"I think that your are in general absolutely correct about the attitude, not only of ancient people, but also of ordinary folk, concerning tales about the past. What matters most is whether they are "true" in some existential sense, not whether they correspond to "facts" in every respect."
"Now, the gods in those creation stories [speaking here of the Egyptian creation stories] appear in multiple and conflicting accounts. There is no attempt at consistency either within any given account or across accounts."
He then goes on to compare this with the similar contradiction between the two Hebrew creation accounts. Then, later:
"Among the Hittites and among the Caananites, in those cultures, there are mulitple and sometimes conflicting accounts [of creation]. There is no attempt at consistency and no claim to consistency."
And, yet, these ancients still believed these stories, and told them all even though they conflicted. They were still "real" in a very important sense even though they realized these various accounts could not all be strictly historically accurate. Those factual inconsistencies didn't seem to bother them in the least.
And from a discussion on Maimonides and the view of Jewish community regarding literalism:
"The feverish concern of the "scientific creationists" to protect a literal reading of the story in Genesis 1 reflects a conviction that devotion to the Bible requires one to interpret it -- particularly Genesis 1 -- literally and accept it in its literal sense. But, as Steven Katz notes in his "Afterword" to Jastrow (p. 159), "In Jewish religious thought Genesis is not regarded as meant for a literal reading, and Jewish tradition has not usually read it so." In fact, as we shall argue below, even the compilers of the Bible do not seem to have been concerned with a literal reading of the text. They were prepared to have at least parts of it read non-literally.
In the Middle Ages, Saadia Gaon argued that a Biblical passage should not be interpreted literally if that made a passage mean something contrary to the senses or reason (or, as we would say, science; Emunot ve-Deot, chap. 7). Maimonides applied this principle to theories about the creation. He held that if the eternity of the universe (what we would call the Steady State theory) could be proven by logic (science) then the Biblical passages speaking about creation at a point in time could and should be interpreted figuratively in a way that is compatible with the eternity of the universe. It is only because the eternity of the universe has not been proven that he interpreted the verses about creation at a point in time literally (Guide, II, 25), but he still insisted that the creation story as a whole was written metaphorically (Book I, Introduction).