Are stories available only in print or is the oral storytelling tradition very much in evidence? Is there a storyteller/scribe role within the world you've set up? Do the stories within your story affect how your character acts and reacts? Do they want to be or to ape the legends their world honours?
In my fictional Fairy Kingdom the villages and towns put on re-enactments of the classic fairytales to keep them alive. What would your world do here? What can you tell about your characters from the stories they love and can they be persuaded by other characters to try other tales and genres?
What is it about the legends in your setting that have them become/be treated as legends? There are stories to be written about the story behind the story! And certainly someone's taste in literature can reveal a great deal about them so that alone would be helpful for character portrayal.