The earliest biblical interpretation traditions we have are at the end of that timescale--for earlier, we just can't know. But yes, things are non-literal. Early texts, such as the Book of Enoch (first few centuries CE), indicate a substantial body of religious tradition outside the bible. Early Christian texts are definitely non-literal. The NT is littered with non-literal interpretations of OT passages--generally, verses without explicit messianic references are taken to be non-literal allusions to Jesus of some sort. Early Rabbinic texts are decidedly non-literal, and often have interpretation of biblical laws that you wouldn't arrive at from a cursory reading of the text.

I do not understand why the ancient Hebrews would have regarded the Scriptures as metaphorical as opposed to actual historic truth.

Well, Jews and Christians have both always had bodies of theology that are outside the bible--you can't just read the bible and arrive at a cohesive theology. It's pretty clear from religious history that you need something more. Additionally, for the Hebrew bible, if you read 100% literally you get contradictions pretty quickly. It just doesn't work as a entirely literal work. Even sects that have rejected theology outside the bible (such as Karaites. There are Christians like this too, but I know less about them) still use interpretation and non-literal readings. In some cases Karaite readings are actually less literal than the usually further from a surface read Rabbinic Jews.