Literalism is neccessary to Islam in the sense that the Quran is infallible, for Gods promise itself is in it that HE will protect it [from distortion] till the last day
but not all Quranic verses are litteral in meaning; there are metophorical one's there and a contextual meaning is derived from many others
this 'infallibility' of the Quran is proven by the verifiable evidence of mass transmission of every single verse of it, i.e, such a large number of people have transmitted it in every generation that it would be virtually impossible for all of them to have colluded to tell a lie, and this form of evidence is considered to be the most concrete in regards to authentication
And the fact that the consensus of the orientalists say that the Quran of today is the original that has been conveyed by the Prophet Muhammad [saw]