Illusionistic (realistic) versus Abstract

In art class we had a discussion about types of artwork you can make. On one end of the scale lies illusionistic or extremely realistic looking pieces of art and on the other end is the abstract which doesn't seem to resemble actual things at all.
Our teacher proceeded to show us a video about an artist. She spent forever on her pictures and they looked life photographs. We also did an activity where we transformed a realistic drawing of a still life. Throughout six drawings the objects were abstracted through blowing up, deflating, curving, and straightening the lines and shapes of the image. A lot of creativity was involved in this process.
The important part about this is how it applies to Shakespeare.
Writing is a form of creativity and a form of art. Therefore Shakespeare was a creative person and an artist. His plays remind me a lot about the difference between realistic and abstract ideas. One one hand Shakespeare's characters are realistic in that they portray the inner desires and struggles and true characters we see in real life people. On the other hand, his stories seem to be just that, stories. They don't feel like they could really happen and if they did it would be unbelievable. Hamlet, for example, shows a lot of inner turmoil that people can relate to in certain aspects but him being completely crazy and then everyone dying in the end of his story makes this a play and not a memoir. And then in The Winter's Tale Leontes is a little extreme but we can all admit that we've had worries and jealousies before as well. But then the oracle is correct, many people die, and a bear chases someone off of the stage. And then the spring half of the play shows this miraculous pair of royalties that somehow found each other and then everyone is reunited. It just couldn't happen in real life!
But how else would Shakespeare have an audience? How would we, as his readers, respond to something not fantastical but almost believable at the same time? This is what charms us, I think. The realistic quality that gives our creative minds hope for it to happen and the abstract quality that makes us wonder if it could, these things are what tickle our imagination.