There is no conflict between literary style and genres with the assumption of divine inspiration
Scholars who acknowledge the need to study the Bible in its literary context explain that this approach should be the default and essential, not an additional side tool for interpretation. Following are some highlights from Ryken's ESV Literary Study Bible, Introduction. It also includes the article on the 5 fallacies about the literary approach to the Bible.
The subject of literature is human experience rendered as concretely as possible. The result is that it possesses a universal quality. Whereas history and the daily news tell us what happened, literature tells us what happens—what is true for all people in all places and times. A text can be both, but the literary dimension of a text resides in its embodiment of recognizable human experience. [...]
Literature is an art form in which beauty of expression, craftsmanship, and verbal virtuosity are valued as rewarding and as an enhancement of effective communication. The one writer of the Bible to state his philosophy of composition portrays himself as, among other things, a self-conscious stylist and wordsmith who arranged his material “with great care” and who “sought to find words of delight” (Eccles. 12:9–10). Surely our impression is that the other writers of the Bible did the same.
Summary: Reading and interpreting the Bible as literature. Any piece of writing needs to be assimilated and interpreted in terms of the kind of writing that it is. The Bible is a literary book in which theology and history are usually embodied in literary forms. Those forms include genres, the expression of human experience in concrete form, stylistic and rhetorical techniques, and artistry.
These literary features are not extraneous aspects of the text—not optional matters to consider if we have time or interest to do so after we have assimilated the message or content of a passage. Instead, they are the forms through which the content is mediated. If the writing of the Bible is the product of divine inspiration—if it represents what the Holy Spirit prompted the authors to write as they were carried along (2 Peter 1:21)—then the literary forms of the Bible have been inspired by God and need to be granted an importance in keeping with that inspiration.
Catholic Decree on Biblical Hermeneutics
The decree The Interpretation of the Bible in the Church by Pope John Paul II in 1993 laid out the principles required for Biblical interpretation, explaining the Bible study is a never-ending endeavour, and that "each age must in its own way newly seek to understand the sacred books". It affirmed the modern historical critical research and literary methods of interpretation and literary criticism, warning against naive fundamentalism, which is a product of Americans. Some selected quotes with emphasis under the :Fundamentalist Interpretation -:
Fundamentalist interpretation starts from the principle that the
Bible, being the word of God, inspired and free from error, should be
read and interpreted literally in all its details. But by "literal
interpretation" it understands a naively literalist interpretation,
one, that is to say, which excludes every effort at understanding the
Bible that takes account of its historical origins and development. It
is opposed, therefore, to the use of the historical- critical method,
as indeed to the use of any other scientific method for the
interpretation of Scripture.
The fundamentalist interpretation had its origin at the time of the
Reformation, arising out of a concern for fidelity to the literal
meaning of Scripture. After the century of the Enlightenment it
emerged in Protestantism as a bulwark against liberal exegesis.
The actual term fundamentalist is connected directly with the American
Biblical Congress held at Niagara, N.Y., in 1895. At this meeting,
conservative Protestant exegetes defined "five points of
fundamentalism": the verbal inerrancy of Scripture, the divinity of
Christ, his virginal birth, the doctrine of vicarious expiation and
the bodily resurrection at the time of the second coming of Christ. As
the fundamentalist way of reading the Bible spread to other parts of
the world, it gave rise to other ways of interpretation, equally
"literalist," in Europe, Asia, Africa and South America. As the 20th
century comes to an end, this kind of interpretation is winning more
and more adherents, in religious groups and sects, as also among
Catholics.
The basic problem with fundamentalist interpretation of this kind is that, refusing to take into account the historical character of biblical revelation, it makes itself incapable of accepting the full truth of the incarnation itself. As regards relationships with God, fundamentalism seeks to escape any closeness of the divine and the human. It refuses to admit that the inspired word of God has been expressed in human language and that this word has been expressed, under divine inspiration, by human authors possessed of limited capacities and resources. For this reason, it tends to treat the biblical text as if it had been dictated word for word by the Spirit. It fails to recognize that the word of God has been formulated in language and expression conditioned by various periods. It pays no attention to the literary forms and to the human ways of thinking to be found in the biblical texts, many of which are the result of a process extending over long periods of time and bearing the mark of very diverse historical situations.
Fundamentalism also places undue stress upon the inerrancy of certain details in the biblical texts, especially in what concerns historical events or supposedly scientific truth. It often historicizes material which from the start never claimed to be historical. It considers historical everything that is reported or recounted with verbs in the past tense, failing to take the necessary account of the possibility of symbolic or figurative meaning.
Fundamentalism likewise tends to adopt very narrow points of view. It accepts the literal reality of an ancient, out-of-date cosmology simply because it is found expressed in the Bible; this blocks any dialogue with a broader way of seeing the relationship between culture and faith. Its relying upon a non-critical reading of certain texts ...[ ]
The fundamentalist approach is dangerous, for it is attractive to people who look to the Bible for ready answers to the problems of life. It can deceive these people, offering them interpretations that are pious but illusory, instead of telling them that the Bible does not necessarily contain an immediate answer to each and every problem. Without saying as much in so many words, fundamentalism actually invites people to a kind of intellectual suicide. It injects into life a false certitude, for it unwittingly confuses the divine substance of the biblical message with what are in fact its human limitations
