I might modify what you are saying here a bit. I think the ancient Bible writers were very aware of the historical significance of what they wrote. While the Bible isn't technically a history book (or science book), its claims are very detailed, and archeology has proven it right far more times than wrong.

But that's separate from writing allegorical stories, where authors use a literary tool to convey an idea. The Old Testament writers were masters at containing the fullest possible meaning in a short, archetypal story.

Most biblical confusion is caused by confusing the literal with the allegorical. Is the story of Adam and Eve an allegory? Eve, being tempted by a snake in the Garden of Eden rings with allegory. If those stories stop there, there is no confusion. They are allegorical. But soon after, the Bible authors list an extremely detailed genealogy staarting with Adam up to the birth of Jesus. That part isn't allegorical. Muddy water now.

Like you, I'm not sure it matters whether the story is literal, perfectly true in every physical detail, or allegorical as long as it conveys the deeper truth, which is the point of the story.