I still need to learn more concerning just HOW these supposed "contemporary" authors who knew jesus or knew those who knew him and wrote about him, can have a group of people living at the same time called the Gnostics( believed in a "spiritual" non-historical jesus) , and that these gnostic did not ALSO believe in a literal Jesus. Why didn't they? They were there as were jesus diciples and apostles were they not? Why didn't THEY also see miracles and check out these wonderous stories about this man Jesus?
Nowhere do the synoptic writers claim to have personally "known" Jesus. Even second-century traditions about Luke and Mark (which themselves stem from Papias of Hierapolis, who is not exactly trustworthy) acknowledged that the authors were at least a generation removed (tho had personal contacts with apostles).
I'm not sure it is fair to homogenize everything on the gnostic spectrum as all involving a "non-literal" interpretation of gospel narratives. To a large extent they are treated as allegorical, which is along the lines of Platonism (cf. Philo of Alexandria, who allegorized on the stories of the Pentateuch), and the second and third century gnostics were heavily influenced by Middle Platonism to be sure. But not all approaches to myths in antiquity were "non-literal" (we have the euhemerist approach which treated myths as concerning deified heroes, for instance) and it is not clear whether proto-gnosticism (which was closer to our NT material) was less allegorical than what is found in later texts. I am personally not convinced that a non-literal "Jesus myth" lay at the earliest substratum of Christianity. It is, to be sure, found in the earliest texts, namely Paul, but was Paul representative of the broad spectrum of primitive Christianity? I have my doubts about that. I find G. A. Wells' view more plausible that there was likely a historical Jesus who became merged with a co-existing "savior myth" in Hellenistic Christianity (i.e. in Paul and Mark), with (in my view) the earlier Jewish-Christian community reinterpreting the meaning of Jesus' death-resurrection from one of vindication and justice (along traditional Jewish OT and Maccabean models) to one of salvation and redemption.
That a historical figure can be "mythologized" after his death even by people who knew him has a precedent in the Qumran community who mythologized the Essene "Teacher of Righteousness" (the founder of the community, who lived in the early second century BC) into a figure who suffered (cf. the Qumran Pesharim), who taught truth against the "Wicked Priest", who established the true understanding of the Law (similar to how Jewish-Christians understood Jesus, cf. Matthew), who was exalted after his death (if 4Q427 is to be understood in that light), and who would teach righteousness in the end times (cf. the Damascus Document). All this would have been based on contemplation on the Teacher of Righteousness' role in the scheme of things...