We can get to the heart of Chesterton's thought in two key chapters. The first is "Man and Mythologies" (Part 1 Chapter 5). In this chapter we find Chesterton's overall characterization of myth, and it is framed in a manner that will strike anyone with a Thomist background as remarkably familiar. First, Chesterton explicitly recognizes the function of myth:
What are here called the Gods might almost alternatively be called the Day-Dreams. To compare them to dreams is not to deny that dreams can come true. To compare them to travelers' tales is not to deny that they may be true tales, or at least truthful tales.
Myths are not allegories.
In this respect it is useful to contrast myths as Chesterton describes them with Plato's use of "myths" in his dialogs, such as The Myth of the Cave, or The Myth of Anamnesis (Recollection). Plato's use of myth as a form is rendered ambiguous by the uncertainty that the reader experiences: how literally are these myths or "likely accounts" to be taken? Are these Platonic myths strictly metaphorical or do they--at least in some instances--seek to formulate a more "scientific" account behind a facade of modesty? Certainly the Myth of the Cave could be considered to be in the nature of an analogy, but the Myth of Anamnesis appears to be more like an attempted explanation in a quasi-scientific sense. It is definitely not an analogy and its very structure invites further speculation, fueled by logic rather than metaphor. Certainly its various transformations throughout the history of Western thought (Augustine's Divine Illumination, Kant's Categories, etc.) demonstrate that it has been taken to be an attempt at explanation. This tendency to mistake myth for explanation and even for science can be linked to the Platonic (in the broad sense) view of being as essence: the Platonic essences are Ideas (Forms) with a univocal rather than an analogical meaning.
Chesterton touches on this aspect when he writes:
These are the myths and he who has no sympathy with myths has no sympathy with men. But he who has most sympathy with myths will most fully realize that they are not and never were a religion, in the sense that Christianity or even Islam is a religion.
Chesterton moves even closer to the core issue of human nature and man's proclivity for myth when he writes:
The substance of all such paganism may be summarized thus. It is an attempt to reach the divine reality through the imagination...
It is only ... when such cults are decadent or on the defensive, that a few Neo-Platonists or a few Brahmins are found trying to rationalize them, and even then only by trying to allegorize them.
Mythology, then, sought God through the imagination; or sought truth by means of beauty ...
Chesterton returns to this topic in "The Escape from Paganism" (Part 2 Chapter 5). Here he explictly addresses man's use of story (myth) as a vehicle for communicating truth:
The life of man is a story; an adventure story; and in our vision the same is true even of the story of God.
The Catholic faith is the reconciliation because it is the realization both of mythology and philosophy. It is a story and in that sense one of a hundred stories; only it is a true story. It is a philosophy and in that sense one of a hundred philosophies; only it is a philosophy that is like life. But above all, it is a reconciliation because it is something that can only be called the philosophy of stories. That normal narrative instinct which produced all the fairy-tales is something that is neglected by all the philosophies--except one. The Faith is the justification of that popular instinct; the finding of a philosophy for it or the analysis of the philosophy in it.
Beyond the broad suggestion of this chapter I attempt no apologetic about why the creed should be accepted. But in answer to the historical query of why it was accepted, and is accepted, I answer for millions of others in my reply; because it fits the lock; because it is like life. It is one among many stories; only it happens to be a true story.