Biblical literalism is a relatively new phenomenon, and mostly a Christian one. Jewish (and many Christian) theologians have for many, many centuries regarded such things as the seven-days, two-parents creation story as myths. The questions isn't whether the mythology is true in the sense that science is true; of course it isn't. The question is whether what the mythology is intended to communicate is true.
The moral offense that moderns tend to find in the story of the killing of Egypt's firstborn is rooted in our individualist morality. The ancient view was that every member of the tribe was to some extend morally responsible for the tribe as a whole. When the pharoah offended, all of Egypt suffered, just as later all of Israel would suffer for the offenses of idolators and such.
I suspect that collective morality on that scale is quite alien to most of us, but it's fundamental for understanding the biblical worldview. But still we might ask, for instance, Are all Americans to some extent to blame for Iraq, or is blame restricted to the formal government and chain of command, or to those who voted for Bush, or to those who voted for Bush and those who didn't vote at all, or ...?