Dylan was absolutely steeped in the folk tradition by the early 60's, he loved it, and he wrote a great many genuine folksongs and covered many trad songs brilliantly. Have you heard his 1964 live recording of "Barbara Allen"? It's stunningly powerful. He WAS a great folksinger, man, but he decided after a bit to do some other kinds of music instead, that's all. It was his decision to change his musical style that pissed people off. They didn't want him to change.

As for the layers of meaning not apparent to the composer himself at the time he writes the song....yeah! That nearly always happens with really fine songwriting. That's because there's far more than just you conscious, analytical mind involved in the process. Dylan would be the first to admit himself that he didn't necessarily know what something was about at the time he wrote it...or even later in some cases. He wrote by sheer gut instinct. That's how really great songwriting is done in my opinion. It's the mediocre crap stuff you hear all the time on the radio that is done by premeditated calculation. No surprises there...not for the write or the listener. Dylan's stuff surprised people, and according to what I've heard it surprised him sometimes too.