You said, in part: There are lots of ancient stories written about from all over with the stories varying only slightly. The Illiad is one example.
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I don’t think anyone ever believed that The Iliad represented a true account of facts. This is akin to saying that news accounts are not true because fiction is being written today, and sometimes published by the same publishers.
The Illiad inspired German archaeologist Heinrich Schliemann to find the city of Troy - he obviously believed it was true. It could be argued that Homer himself believed it was true. And the ruins of temples demonstrates that the people living at the time believed the gods mentioned in the Illiad were real.