Plato's view was that poetry is a divine madness - theia mania - and that it is better avoided. He recommended philosophy instead. This seems a bit extreme, and a bit dull. Not all poetry is the product of any kind of mania, and many poets are perfectly sane. Some philosophy, on the other hand, is pretty mad, and does come across as a kind of poetry, though mostly bad poetry. Poetry is not all tall tales, as Plato thought, though some of it has an aspect of fiction. Take for example John Clare's "Autumn Birds", which begins, The wild duck startles like a sudden thought, And heron slow as if it might be caught. The flopping crows on weary wings go by And grey beard jackdaws noising as they fly. There is nothing maniacal about this. Imagination can rise to a kind of poetic description of fact, brilliant and accurate as a mere statement of fact could not be: "The wild duck startles like a sudden thought . . .", for example. The quotation from David Schmidtz seems perfectly reasonable as a piece of...

My answer to this is a firm "Yes". Novels, for example, "tell the truth" better than any other written material, with the exception things like diaries and letters, unless you think of the relevant passages of diaries and letters as though they were mini-novels. But diaries and letters are no better at telling the truth in the appropriate sense than the skills of their authors. What sense is the sense in which novels (or more generally imaginative writing) can "tell the truth" better than any other "Areas of Knowledge", as you call them? (I imagine that you might have the sciences in mind.) The sense is one in which telling the truth has to do with getting the details of a description absolutely right, and getting the overal balance and colour and mood of what one is describing absolutely right. Here psychology for example (which might be thought to "tell the truth" better than the novel) is no better than the sensibility (the eighteenth and nineteenth century word) of the individual working...

You should also read, "How Can We Be Moved by the Fate of Anna Karenina?" by Colin Radford, and the literature that developed in response to it.