What happens when the non-physical narrative world touches the objective, physical world of biology?

Do you believe that we are naive realists? Our perception is like a tunnel through which we see reality with peripheries that do not allow all stimuli to enter. Though we are limited in perception, our stubbornness and argumentativeness makes it seem that we like to think we know it all, making us naive realists at heart. What does psychology and neuroscience have to say about all of this?