This is not the way I use literal or literalism. Is this real industry jargon or something he made up. I think I've previously something similar described in the "death of nuance."
I think he is observing that we live in a fundamentalist age. By "fundamentalist" I mean "there's one right answer", that is, no nuance. Even on the political Left, where you normally find some nuance, you get a fundamentalism that requires interpreting everything through an oppressor/victim lens that assigns groups to one or the other. So Palestinians are "victim", despite the fact that the Muslim view of homosexuality would be categorized "oppressive". White people are "oppressor" because they enslaved people, despite the fact that young white men died by the hundreds of thousands in a war to end slavery, and that the British Empire ended slavery in the Ottoman Empire by refusing to trade with them if they continued slavery.
"When I say literalism, I don't mean realistic or plainly literal. I mean literalist, as when we say something is on the nose or heavy-handed, that it hammers away at us or beats a dead horse. As these phrases imply, to re-state the screamingly obvious does a kind of violence to art. "A point is still a point!""
Hope this is helpful.
[0]https://www.newyorker.com/culture/critics-notebook/the-new-l...