It is perhaps wrong to ask religion how it works, since logic is not what it does. Moreover, most allegorical interpretations are after the event, and usually related to stories that have lost their earlier and original meaning several times over. So that the only deep and meaningful thing to be learned is, what stories push the psychological buttons of humans best and why, for which it may be true the oldest religions, furthest removed from historical fact, are certainly the best.

But that in turn also means that all the old stories are equally good at telling the same truths about our likes, so that you may as well study the Greek myths or Robin Hood, if fundamental things are your interest.

Lord Krishna showed the whole universe in his mouth means Krishna revealed His true identity as the whole universe. Similar metaphor in Gospel Spiritual "He's Got the Whole World in His Hands"