So I got frustrated trying to understand what was going on in the Zhuangzi. I then got on Amazon and bought three books on it. The first one: Chuang-Tzu(Zhuangzi) For Spiritual Transformation, by Robert Allinson, claims that the Zhuangzi's inner chapters(1-7, the ones most likely written by the historical Zhuangzi) are intended not as a mere relativist treatise, but is meant to cause a 'spiritual transformation'. I read the Tao Te Ching this way so I think this point of view has some merit.
Allison says that the mythological beginning is not just some obvious relativism, rather, it is intended to cause the reader to relax the analytic part of the mind and release the intuitive and aesthetic part of the mind. He warns that the analytic part of the mind will be engaged in the text but that it is important to release it at the beginning.
Allison says that the myth is not literally true but is true in some other sense. I agree with Allison that the aesthetic sense is being engaged throughout the text since there are so many literary devices used. Allison writes:
"If we brush aside the literary beginnings to 'get at the meat of the text' we will never find the meat. Or, if we do, we will have no capacity for recognizing it when we do or for being able to digest it and assimilate its nutritive value."(pg. 29)
Allison goes on to say that the literary beginning is crucial to putting us in the state we need to absorb the work.
"We are being asked to learn how to cognize preconceptually. While the myth cannot explain how we are to do this, it is plainly an invitation to try. In that which follows, I hope to make it very evident how the engaging of the aesthetic or preconceptual mind is a precondition for the proper understanding of the message of the Chuang-Tzu."(pg.29)
So, this book is not intended as dry philosophizing ala Western Philosophy. Again, I go back to my reading of the Tao Te Ching and say that I see the intent there as well. This philosophy is not merely about epistemology...
I'm looking forward to more of what Allison says since I don't know how to take the conversations with Confucious later on. Perhaps Allison will give some insight here....