Full passage, spoken between a physician and a nurse:
[Nurse:] “Aren’t they any closer to a vaccine then?”
She shook her head and her loose braid leapt. “No one’s even managed to isolate the bacterium on a slide yet. Perhaps the little bugger’s too small for us to see and we’ll have to wait for the instrument makers to come up with a stronger microscope, or possibly it’s some new form of microbe altogether.”
Of note, the novel, The Pull of the Stars, is set in Ireland
In the late 19th century, there were many infectious diseases with unknown causes. Bacteriology was a new science, and many bacteria are difficult to culture, so unidentified causes were to be expected. Still, there had already been speculation that some diseases by might caused by organisms too small to see under the microscope, rather than by conventional bacteria (e.g., Pasteur suggested this as a possibility for rabies, when he failed to find a cause).
Enter the Chamberland filter: a filter fine enough to filter out all known bacteria. Pasteur had used it to produce bacteria-free water for his experiments (Chamberland worked with Pasteur). The Chamberland filter led to the discovery of bacterial toxins (e.g., tetanus), when the filtrate (i.e., what goes through the filter) was shown to be able to cause the symptoms of the disease. It also led to the discovery of viruses. The first was the tobacco mosaic virus, the infectious agent of which was shown to be able to pass through such filters in 1892. This differed from bacterial toxins in that the filtrate from the next generation of infected plants could transmit the disease to a further generation, and so on. The nature of the infectious agent was not known, and some speculated that the agent was a liquid, and others very, very small bacteria. With this uncertainty, the neutral term "filterable virus" was used, with "virus" simply meaning "infectious agent" in this context. The modern term "virus" is a synonym for the "filterable virus" of that time.
Four key further steps in the development of virology were the first demonstration that viruses were particles in 1917, the first crystallisation of viruses in 1935 (tobacco mosaic virus), the observation of viruses under the electron microscope (poxvirus) in 1938, and the discovery that viruses contained nucleic acids in 1939 (RNA in the case of tobacco mosaic virus). In 1917, Félix d'Herelle showed that bacteriophages (viruses that infect bacteria) were particles, but this was not widely accepted for some time, and only became uncontroversial after the first electron micrographs of bacteriophages in 1940.
Thus, virology was still in its infancy during the 1918 Spanish flu pandemic. That the flu was infectious had only become widely accepted as a result of the 1889 flu pandemic (and even then there was still some professional skepticism until the 1918 pandemic). The infectious agent was not identified as a virus until 1933 (for flu in humans; swine flu had been identified as a virus in 1931, and "fowl plague", a poultry influenza, had been identified as a virus in 1901). Thus it was not known at all, let alone it being common knowledge, that the infectious agent was a virus during the 1918 pandemic. It would have been suspected by some, as a real possibility when attempts to isolate a bacterium failed, but suspicion is far from knowledge.
The virus was isolated from humans by a group led by Patrick Laidlaw, in Britain. The research program that led to this discovery was inspired by the 1918 pandemic, when British health authorities realised just how little was known about influenza and other potentially-viral diseases. The program was established in 1922 by the National Institute for Medical Research (NIMR), with Laidlaw as a member of the team. The importance of his results were recognised - he was knighted in 1935, and became Deputy Director of the NIMR in 1936.
Further reading:
A historical introduction to our knowledge of the influenza virus:
The first demonstration that human influenza is cause by a virus:
On Laidlaw's work: