I'm from anengineering backgrounds as well. I think the reason fictions fascinates people is that often they reveal something about a world which most readers would have never experienced in. It is not easy for someone growing up in a newly developed places like Hong Kong to vision what life was like for the upper class aristocrats in pre-WWII Britain was like. And reading Anthony Powell's A Dance to the Music of Time achieves precisely that.
Having said this, I personally think fictions probably reveal far more about the biases of the author himself/herself than the environment he/she was talking about. A British author writing a novel about a mid-19th century Russian peasant probably reveals far more about his own worldview towards Russia, and secondly 19th century world, then what was really the case with the real life 19th century Russia.
Your opinion is exactly the same as my dad's and (admittedly probably just to spite him), I have never agreed with this train of thought. Literary analysis is SO important...and fiction, similarly, should be taken seriously. Yes, novels contain elements of the author's imagination but large segments of the novel develop from more serious issues in our world at large. Consider authors in opressed countries. They cannot write bland, non-fiction novels about the suffering or restrictions that their government or state leader imposes; their book would almost certainly not be published. A fiction book, however, a little more subtle, can allow these authors to express their views and opinions on the matter...and, I might add, give us fantastic insights into how people are living in the circumstances, through character developments, etc...and when it comes to Shakespeare, which is, I believe, where this forum initiated...it does not matter that Shakespeare lived before Marxism..one of the fantastic things about Shakespeare is that his work transcends time and culture barriers...sure, his plays may not have people being lined up on a wall and shot, but the same moral and ethical foundations are in his works, and from these we can further understand the nature of humans and their evils, which has never changed.
Fiction affects the way people see the world. Shakespeare virtually invented modern English and the idea of the human personality as an ever changing thing. You don't think something like Uncle Tom's Cabin or 1984 had an effect on history?