regarding musical literacy;

from the University of Michigan-

Crowley, Robert ? The Psalter of David newly translated into English meter in such sort that it may the more decently, and with more delight of the mind, be read and sung of all men (my italics). Whereunto is added a note of four parts, with other things, as shall appear in the epistle to the reader 1549 London

four-part Psalter melodies
Contertenor.
Tenor.
Playn songe.
Bassus.

Which suggests that the writers assumed at least a small number of "readers" in the congregations, not necessarily instrumentalists.

Purely a surmise, but the youngsters in the community might have been encouraged to sing in the church choirs, so they may well have gained some literacy.