Mythic fantasy is story that contains the stuff of myth, legend, and fairy tale; it works like waking dream and nightmare; in it, concrete and abstract, previously distinguished, have been reintegrated; it is apprehended by the reader as a unity of meaning and being; the signal of this apprehension is a sense of wonder or a thrill of horror, or both.
In other words, fantasy in general can be either high or low, or both. The best kind is mythic, and it's about reality,
real reality, not the stuff we make up to make ourselves feel safe in our own little made up worlds that we call "real life".
Actually,
Imladris, Tolkien said that "fairy story" is about reality .... which means truth. So "yes" to everything you said.