While the town mentioned in the story differs with each retelling, it is entirely plausible that the town did exist once. During the Realm Wars many such small villages were completely wiped out by the waves of demons that poured in from Hel. Often soldiers from the battlefront would return home to find their families killed and their homes burnt down. The section on the gods blessing is completely believable as well. During the Realm Wars the gods were present within the Mortal Realms for centuries and would often reward exceptionally heroic acts with boons. It is also not unlikely that the gods were the ones that suggested the incursion into Hel.
The legend is probably one of the most well known tales in the Mortal Realm. Every tavern will have a song of either the adventurers or their travels. Little children are told tales of the bravery of the heroes and how they won many battles while in Hel.
Variations & Mutation
The variations of the myths depend on the region you hear them in. Depending on the location the name of the town will be a local one and the party will be made up of ethnicities found in the current country to make the story more relatable to the listeners. Sometimes a local folk hero will also make its way into the party to elevate their status as well.
There is not a minstrel or storyweaver in the Mortal Realm that does not have their own version of the legend. You scribes are also taught their letters by reciting and copying sections from the legend or poems about the party.