Were nuanced stories common in that time? I've also heard a lot of the quirks in the Iliad (huge lists of heroes and ships with their cities of origin and repetitive phrasing) being explained as crowd pleasers for oral performances. It doesn't fit to me that one second the crowd would be cheering because their city was mentioned and in the next having warm fuzzies for Hector and his son.
Your right the Trojans are treated with a lot of sympathy. Hector is seen by some as the hero of piece and Aeneas is also shown very positively.
Greek myths, plays and other writings don't really show the same Good vs Evil dynamic that you get in Christian culture. Their religion shows this particularly well, since the Olympian Gods are neither good nor united in any fashion (In the Iliad the gods are at war as well, Aphrodite, Ares & Apollo siding with Troy, Poseidon, Hera & Athena siding with Greece). Essentially, Greeks didn't need to know that they were righteous and their enemies were sinners (unlike Christians, Muslims, etc) because it was part of they viewed the world.
There are several examples of Greek writers being sympathetic to foreigners and enemies: Euripides' play 'The Trojan Women' depicts the aftermath of the Trojan War, casting the Trojans as victims and the Greeks as villains. Aeschylus' play 'The Persians' depicts the aftermath of the battle of Marathon from the Persian perspective. Xenophon and Herodotus' history also show a lot of sympathy with Easterners (though sometimes they are a bit ignorant or patronising).
Followup question:
Weren't the Trojans Ionian settlers in Asia Minor?
I think it is important to have in mind that in the few records we have for the war,most of them are describing it in a more philosophical or religious way,as a kind of a parable. Instead of presenting one side as good and the other as evil,both parties are presented as equally human, driven by their passions,and merely pawns of Gods and Goddesses on a grand chess board.