Did every person who is mentioned in the Bible actually exist?
It is probably true that most of them did exist.
Having made that statement, we should clarify that Paramhansa Yogananda said that many myths, legends, and even scriptures are often more metaphorical than completely factual.
For example, most of the named characters in the Mahabharata, one of the holiest scriptures of India, did live, had many adventures, ruled kingdoms, and fought in a great civil war. But the author of the Mahabharata took real historical events and people and in the process of telling the stories (and they are very entertaining stories!), used them as symbols for various aspects of our spiritual quest for inner freedom and oneness with God.
It is often easier to remember an important spiritual or moral point if it is woven within a story which captures your attention. A good example of this is Aesop’s Fables.
In the case of the Bible, Yogananda said that this principle would tend to apply more to the Old Testament than the New Testament. But it is an important principle, not to be overlooked when we study any scripture or ancient teaching.
In the final analysis, is would be wisest to depend on the interpretations of scriptures by a God-realized Master, more than depending only on your own understanding or any other person’s interpretations.