Did the ancient Greeks believe that the residence of the main Olympians on the top of Mt. Olympus to be literal? Or is Mt. Olympus used as a metaphor to explain that the gods resided on the highest point on Earth as understood by the Greeks? Do we have any evidence to indicate that some people believed the latter?

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the answer is both and depends on time and you can see evidence of that fashion in various other religions (eg. judaism in it's early form described god as a king who sits on his chair while it changed to more abstract entity)

speaking specificly on the greeks we know for a fact that offerings were founded near it's peak from wikipedia:

But surely they reached the nearest peak, nowadays called Aghios Antonios, from where they had a view of the two peaks and where they left offerings, as recent archaeological findings indicate


i remember reading of some mythology book that in roman periods it was more of a concept but sadly i don't remember which book was it! I can assume and i believe that assumption is logical that in ancient times before grecko-roman philosophy was fully developed it was more of a physical location of the gods and i assume that the gods and their location changed to more abstraction when philosophy was developed. either way i don't know if there're solid proofs of the latter but one must ask himself, do a nation that explored the ancient world so much to the extent of reaching india (i refer to alexander's conquests) belived that it's the physical location at that point? think of it back then the ural mountains to certain cultures were "the end of the world" the greeks passed that as well so it's a very good question and i doubt my answer will suffice your needs

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