I don’t think the narrative is literally true, no. But I do perceive it to be deeply, absolutely, and universally Real. Let me explain.
We often progress through faith in stages. The American theologian James W. Fowler outlined these in a well-known book, Stages of Faith.
We generally start life with being open to believing whatever people tell us. What our parents teach must be the absolute truth, Santa Claus and all, and so we believe it wholeheartedly. It is our only reference point in life, and so why wouldn’t it be true? As we grow we begin to learn more about the world, and come to realize that what we thought was absolute truth was really more of a relative truth, perhaps true at the stage in which we were at, but not universally or absolutely true. Santa Claus is not a true living elderly elf at the North Pole, but actually our kind and dear parents who only want our happiness and seek our smiling faces on Christmas morning.
We continue to grow, and to seek understanding in the organizations around us, in institutions to teach us the truth. These could be schools, clubs, religions, churches, governments, etc. These now teach us the real truth. But as we grow some more, we realize that even these do not have the ultimate truth. They are just doing what they perceive to be the best possible perspective on life, one that brings the most fulfillment, but their views might not be actually true in the ultimate sense of reality as it is. And so we grow some more.
We go through stages of literal belief in things, believing in the literal truth of all stories that we are told, and gradually we progress to understand that these stories are not necessarily literally true, but they point towards a greater truth that is told through metaphors in the stories. We often learn the best through narratives, since they seem to mirror the challenges that we go through in our own lives. We understand where the characters are coming from, what they are going through, and how they might overcome their struggles. We grow towards the truth.
We grow to be more independent, and discover truth on our own through experiencing the world. Eventually we begin to reach points where even our logic and reason begin to break down. They don’t explain all things perfectly (see e.g. quantum mechanics). And so we open up to paradox and mystery and uncertainty and doubt. We accept these as a natural part of our world and the universe. We come to perceive all people as being in the same or similar stages as ourselves, and we open up to them in love knowing that they are struggling to understand life too. What becomes real to us is love, relationships, intimacy, and self-knowledge.
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At the end of the day, we come to discover, and realize very deeply, that everything that we have learned, all the knowledge, all the stories, all the metaphors and myths, everything we have gone through in life has been pointing us towards an ultimate truth which is Life itself. It all becomes integrated together. This is the Real. This is the Absolute. This is the Christ. We are all in it, we are all of it, we are all It, each and every one. We are all of One substance, the same Essence, even One Humanity living in One Cosmos that continually dies and is resurrected within itself, eternally. This becomes our own resurrection, rebirth, awakening, in our consciousness. We realize that we are not separate from all that is. We are One with all that is. It is all Me, but a collective Me. It is a Mwe. I am One with it. We look around and all we see is the One. We see God in every face, in every creature, and in every blade of grass. And every genuine spiritual tradition is pointing towards this ultimate Truth about Life and our absolute Oneness in this Life (John 17).
Does that mean that Jesus never lived? No. But it means his life may have meant something different than we thought it did, and he may have taught something other than what we thought he did.
There are a couple episodes from Mormon Matters (367-368) that directly discusses this very subject, and it is very good. Discussants include Dan Wotherspoon, Benjamin Knoll, Brian Hauglid, and Susan Meredith Hinckley. I recommend it!