Funny, I just had this conversation with my 5 and 7-year old sons…they seem to agree-this cartoon (their favorite btw) is fantasy; all of it.
Perhaps a point of confusion may be that in the later seasons of the show, they began to have “guests” on the show that were celebrities-The Harlem Globetrotters, Three Stooges, Jonathan Winters (?!)...at any rate, this “schtick” may be the only part where one could possibly be confused by the lines blurring.
Lastly, anyone wonder why Scooby and Shaggy are always so hungry? (Anyone old-skool will get the reference lol). Enjoy.