An interesting alternative, Aelindel. Then there is also the possibility that the Danann were actually mortal ancestors who were, at some point before the Book of Invasions, deified. Granted, this is not as interesting as the whimsical speculations of the Graeco-Romans, like Atlantis or Thule.

Another possibility: Danish and Anglo-Saxon kings and thanes were "given" genealogies with mythological origins, as may also be the case with quasi-historical figures like King Cormac and Fionn mac Cumhaill.