Actually you're misunderstanding what is meant by literal. It is not talking about literal vs. figurative speech. Literal Interpretation means that you are faithful to the author's intended message, not treating it as an allegory where you read into it whatever meaning you wish.
There was a time with the ancient Church where people sought to find allegorical meanings to scripture. So the meaning of a passage, depending on who was reading it, not what the author wrote. Literal interpretation means that we seek to determine the author's intended meaning, by studing the context, and applying the proper rules of grammer to it. We do not ignore metaphor, or symbolism, we attempt to find the author's intended meaning for it, rather than choosing one of our preference.
Your explanation of "literal interpretation" seems very different than the author's. You explain "literal" positively, whereas he was using "literal interpretation" as a negative aspect of Fundamentalism.