I don't disagree with your view of Livy, especially the early parts (books 1-10). The 2nd Punic War is more factual but still like the fables of the earlier volumes in the sense it's first and foremost a ripping good story. I first read Livy's account of Hannibal burning and pillaging down the Val di Chiana in Italy while sitting on a hill overlooking his march. It was part of his successful plan to enrage the Roman Consul Flaminius and entice him into an ambush at Lake Trasimene. You could look out over the flat valley and imagine the smoke rising up where the Romans could see it easily. Reading history does not get much better than that.
Incidentally I believe that in Germania Tacitus was holding up a mirror to Rome so the bias goes the other way The praise of the German tribes was a hit on his own citizens. For example, the memorable inference in Section 2 that nobody would leave Italy for the awful weather, formless land, and sorry agriculture of Germany unless they were natives was implicitly a criticism of the effete Romans.
Tacitus is the singular exception. He's exalted by Germans for Germania and Agricola has the immortal line,
I kind of rank Livy with Herodotus who'd never let facts or especially lack of facts get in the way of a good story. Tacitus I rank with Thucydides.