The error of fundamentalist approaches to Scripture is not that it overemphasizes the literal sense. It is, rather, that it impoverishes the letter.
The distinction between the literal sense and spiritual sense has nothing to do with degrees of truth. In the literal sense, meaning is had through words ("literal" comes from the Latin word for letters); in the spiritual sense meaning is had through the things spoken of. The former has to do, that is, with the manner of presentation in Scripture (the words that signify), and the latter with what is signified.
The literal sense includes metaphor and parables. Metaphorical truth, one might say, is even more purely literal than straightforward historical narrative, because it has more to do (proportionally) with what the author intends to convey by his expression and the latter more to do with the meaning of what is expressed.
Literalism of the fundamentalist sort is that spoken of by Paul, when he said "the letter kills, but the spirit gives life."