When first I read the Zhuangzi I was put off by the mythical story that is its opening trope. I say this by way of confessing my close-mindedness. A vast fish transforms into a huge bird and flies from one oblivion to another. Did he actually believe this ridiculous story? Is this book just one more fanciful explanation of the world?
Of course he did not believe it. But unlike me, he felt no aversion to myth; perhaps he realized that everything we say about the world is, in the end, myth.
If we want to know why he began with this fantastic story we would do well to begin by considering his audience. Though his way is clearly available to everyone, we must remember that only a tiny elite were capable of even reading his work, not to mention understanding it. Those who did read it were also reading Mohist and Confucian tracts.
According to Robert Eno ("Cook Ding's Dao and the Limits of Philosophy" in Essays on Skepticism, Relativism, and Ethics in the Zhuangzi), though Confucianism seems to be Zhuangzi's principle target, Mohism takes some of his greatest hits, though perhaps only a Mohist would know it. Eno suggests that Zhuangzi shared one very important point of view with Confucius, namely that a dao, to effectively bring one to a transformative experience of Dao, requires a "dao-learning" practice; both are ways of "knowing how", not "knowing what". For Confucius this was to be realized through the performance of rigid and static ritual; for Zhuangzi, it was through every skill that living might require or offer, and thus something more spontaneously and flexibly realized.
Mohism, on the other hand, was rationalistic; it was about explaining the world and living according to the rules that 'logic' revealed. In fact, the Neo-Mohism of Zhuangzi's time spent a great deal of effort formulating rules of logic and argumentation to 'prove' the validity of its way. Confucianism responded to this development by trying to rationalize itself (Xunzi?).
And thus Zhuangzi, iconoclastic joker that he was, began his philosophical statement with crazy stories about a giant fish becoming a giant bird, talking quail, Liezi riding the wind, a spirit-man living on wind and dew, and giant gourds. Wake up to the Mystery of it all! he seems to be shouting. Go beyond the 'understanding consciousness'! Break free of the boundaries and wander in the boundless!
Zhuangzi's audience were not a bunch of dumb rustics who would have believed such myths, and might very well have been scandalized at encountering these, as was I. The mind that, in the name of 'not-knowing' and non-assertion, has closed itself to myth, is a mind still ruled as much by reason as one that thinks that reason has the ‘answer’.
You can check out Scott's writings on Zhuangzi here.