Wait, so... you want me to tell you how to interpret the Bible "keeping in mind that [there] are thousands of current interpretations," while at the same time saying there's only one "correct" interpretation... literalism or nothing. Keeping in mind that this is what we like to call a false dilemma, I will posit a third option (still just one among the "thousands", which, if we're being truthful about it, there are probably MILLIONS of interpretations of the Bible out there... one for each reader).

Certain conservative evangelical Christians have, over the years, surmised that the Bible is to be read at face value and that it contains no errors and is the entire and actual words of God. It's one of the more simply explained and simply attacked positions in Christianity. But, as you've mentioned, it's not the only position on Biblical interpretation.

The Bible is not a book. It should not be read as a book. And so when you apply one interpretation paradigm over the spectrum of the entire Bible, you're making a huge mistake.

Instead, you have to take it book by book and figure out what the book is trying to tell you. Even within books, scholars now know that in a lot of cases, particularly in the Old Testament, these are not the works of just one author.

And within books, styles can change drastically, from history to poetry from one chapter to the next. Obviously, you would not apply the same interpretation to your high school history book as you would Shakespeare, and you wouldn't apply the same interpretation to Shakespeare as you would to Orwell. Style of writing conveys as much as word choice. So, if we look at the Bible, and each book when necessary, as a collection of writings (in other words, if we look at the Bible for what it is), meaning can be more accurately extrapolated.

This is why, in my opinion, when it comes to Old Testament texts, it's so nice around r/Christianity when one of our resident Jewish folk comes along and offers an interpretation that I would have never known because I haven't been raised in synagogue.

Beyond all this, however, is the need for a Christian to, in my opinion, read the entire Bible through the lens of the Gospels. Some disagree with this, saying that the Gospels came after the Pauline epistles, and therefore the Gospels were influenced by the Pauline epistles. I say that the Gospels refine Paul's writings and are easily the most important part of our Bible.

So, with that being the case, if Jesus is the central figure of our faith, and the Gospels tell the story of Jesus' ministry and teaching, we should read the rest of the Bible (Old and New Testaments) through the lens of that ministry and teaching. If Jesus, being the Son of God, is the clearest picture of who God is, the Gospels are the backdrop against which we lay the rest of Scripture.

So... TL;DR: As Christians, we first read the Bible through the lens of the ministry and teachings of Jesus. Additionally, we read the Bible as it is, not as one book, but as a collection of books, some of which are a collection of writings or were edited over time. Each of these writings might bring a collection of styles which need to be interpreted accordingly.