Unfortunately, all I've read of Armstrong have been a very few short columns of hers. I've heard from numerous sources that many of her views are unsubstantiated, but I don't know enough about her to have formed that opinion myself. Her views in the columns I read often struck me as unsubstantiated, but those were columns -- who on earth lays out all the evidence they might have for something in a mere column?
That's fair.
Honestly, I don't think the question of how our ancestors interpreted mythology can be answered definitively. But I know for me, looking at Pagan mythology in particular, I can see no reason to understand it as anything other than allegorical, anthropomorphic, artistic and poetic interpretations of various aspects of reality (and by "reality" I mean to include the otherworlds, by the way). Maps of territory. I haven't honestly taken the time to develop a definitive argument for this with citations and everything, but it just strikes me as intuitively obvious based on my studies over the years.
I suppose one thing I can mention is the fact that there are multiple stories describing the same events. In Hellenic mythology, each god has many sets of parents attributed to it and often several different origin stories. Parentage is a way of describing a relationship between various aspects of reality. If we take the god Eros, for example, his origin and parentage are described in multiple ways. On the one hand, he's sometimes regarded as primordial and as a fundamental organizing force of reality that existed well before the Olympians. In other stories he's regarded as the product of love and war - the two Olympians Aphrodite and Ares - and has somewhat different attributes. All of this screams "storytelling" not "literal/historical/empirical" to me. It just doesn't make any sense if you treat mythology as science or literal history; I highly doubt it was ever intended to be. Now, the natural philosophy of the Greeks on the other hand? A very, very different story. That
was a sort of pre-science, and it also eschews the sort of narrative and poetry of the religious mythology. There were also definitely some narratives that blended in some history, like the Iliad.
As for the Bible, that mythology is a little different. It's more like the Iliad in that it likely blends together historical events and poetic storytelling. I'm no scholar on it, and I rather wish Fallingblood was still around to speak to this topic.