I favour the idea that they were historical individuals who were aggressively added to. I look at similar historical characters from history like Richard the Lionheart or Prithviraj Chauhan, who have had significant mythologizing around them over the years. I believe a similar process took place with the individuals in the narratives, though yes, compounding of characters and narratives with local deities/traditions cannot be ruled out and likely happened extensively. The Krishna character as a child is so different in construction to the adult (uber demigod as a child to crafty background politician as an adult) that it might even have originated as two different characters, certainly IMO representing two different traditions of compounding.
But I nonetheless think that the individuals were originally real people (atleast the main characters). The story of the Mahabharata is a complex series of political events, and the story contains enough irrelevant avenues and minor stories and enough complexity that it speaks to me as a story that had its foundation in real life. In contrast, I'm more willing to believe that the Ramayana is more likely to be fictional, given the greater linearity of the narrative.
As a side note, I don't disparage those who believe that the Mahabahrata or Ramayana is fully historical. The search for the historical reality of the narrative has helped drive a lot of scholarship especially in archaeology and history. This has in turn yielded significant information which has improved our knowledge and understanding of the far past. The quest for knowledge is often driven by romantic notions underlying the scholarly research. That romantic idealism is critical to developing academic passion, which is why I think its important to allow for belief systems even if there is a lack of proof.
But I nonetheless think that the individuals were originally real people (atleast the main characters). The story of the Mahabharata is a complex series of political events, and the story contains enough irrelevant avenues and minor stories and enough complexity that it speaks to me as a story that had its foundation in real life. In contrast, I'm more willing to believe that the Ramayana is more likely to be fictional, given the greater linearity of the narrative.
As a side note, I don't disparage those who believe that the Mahabahrata or Ramayana is fully historical. The search for the historical reality of the narrative has helped drive a lot of scholarship especially in archaeology and history. This has in turn yielded significant information which has improved our knowledge and understanding of the far past. The quest for knowledge is often driven by romantic notions underlying the scholarly research. That romantic idealism is critical to developing academic passion, which is why I think its important to allow for belief systems even if there is a lack of proof.
That the way my Story if not my History Goes 
