I agree that getting chinese whispered into nonsense is a real failure mode, pop sci quantum mechanics shows this well enough. I think it unlikely that there was that much of a real, true and important point behind most myths. Repeatedly rerecord a sound on analogue media enough and you get static. Repeatedly retell a story and you get mythology. We can't tell much about what the signal started as, but I doubt it was all brilliant rationality, because most of our really old documents aren't that rational.
I think we should consider looking at indigenous stories, I've heard that a lot of them encode genuinely useful knowledge about ecosystems, this can be a bit hard to discern from the outside (if you don't live in the old ways in the old ecosystems you wont understand the myths), and colonisation is often so brutal that the connection is lastingly obscured, the ecosystem knowledge is lost and by the time the survivors are ready to return to their roots, the connection is lost, the myths are dead, don't mean what they used to, don't serve a purpose in the new world. Some peoples recognise this and try to start remaking their myths (per my recommendation), but it's hard to tell how the new myths reflect the old ones.
Something I worry about is that a lot of things that qualified as entertainment to the ancients aren't recognisable as entertainment to me. I could potentially be very confused by that. Was it really funny or insightful given the right cultural background, or were the audience just starved for novelty and willing to accept the bare minimum amount of wit? Was it a tacit metaphor for something or were they just amused by the idea of a literal talking fox?
I highly recommend the anime/manga Dr Stone. It's a science-backed adventure in a world where modern technology has been lost and needs to be resurrected. If you care about technology, you'll probably enjoy it quite a lot.
There's something you should know before setting off. There's a reason its characters are not realistic. The author isn't trying much at all to make them plausible depictions of individual people. They're best understood as representations of classes of people, or social processes. Senku isn't a scientist, Senku is science. Likewise, Tsukasa is a representation of competition pressure from societies that prioritise strength and discipline over art, exploration and care. He isn't Moloch - he's a pretty good guy, really - but he's closer to being a thing like Moloch than he is to being a mere human.
Engaging with a story like this while it's still fresh is making me realise some things. I think I might understand why the Greeks' stories were so often about deities (or semideities) rather than people. Was it, at some point (perhaps the point of inception was long before any of it was ever written down), abstraction? Was it a way of talking about great, irresistible forces in a way that made them feel familiar and negotiable?
I'm starting to realise that a lot of theological myths were probably about as transparent, lucid and engaging to their carriers as Dr Stone is to us now. Then the cleverperson who first orated them passed away, and people got distracted with other things and forgot more and more about what they'd heard except that it was important. Someone emphasised the magic-seeming reality of the metaphor too much, literalism set in, the underlying truth was lost. Everything has been cut from its context, mutated, excessively worshipped and hacked partway into something else. The glowing hot brilliance that created our ruins is long gone.
Instead of just applying this theory to interpretation in hindsight, I'm going to attempt to run this theory forward as a predictive apparatus, as is the way of my people. Let's see what it says.
One of our stories, as it stands, while the iron's still hot, while clever Scott still stands sweating over his forge, is the story of Moloch, The Spirit of Coordination Problems.
It could be summarised as
The spirit Moloch truly exists as part of nature. The spirit is described as a recurring degenerative pattern that occurs in systems of competition, which we personify as a flaming bull. It's good to believe in this spirit, because if you fear this spirit as if it were a person, you are more likely to notice tragedies of the commons and instate coordination mechanisms (regulations) to prevent them.
Now imagine that our spirit Moloch has passed through 200 years of oral retelling and cultural evolution. Read the following as if it was really all you knew about Moloch.
The spirit Moloch exists outside of nature. It is a ghostly flaming bull that possesses people and then goes about eating or burning the most beautiful things it can find. It is considered good to believe in this spirit as a literal sapient being, because good people believe in it and if you don't believe in it you must be a heathen.
Most old stories have reached us in a form closer to the second thing. I don't think I have to substantiate that, I'm sure you've felt it. Our stories are all gravely in need of restoration. They were not supposed to be made to trudge on into alien futures that did not really need them, they were supposed to be cut apart and remade to suit the needs of their carriers, that's how they came to be popular in the first place. In living traditions, they are still frequently repurposed in this way. Perhaps there is a reason restoration is not so often attempted, now, but I would guess that it's mostly incompetence, people have forgotten the spark that produced them, forgotten that there ever was a spark, lost the point, lack the courage to make something new of them. Tradition without periodic from-scratch remaking is a kind of death worship, clinging to a small, fading knowable myths at the expense of living on in shifting fields of infinite new claims.