I think the reason you're feeling disappointed is that you're looking to play a Medieval RPG in a game that isn't set in the Medieval times any more, but centuries later when all that lore has been forgotten.
Part of the point of the Fable series is that as time progresses and the society is advancing into a more scientific and industrial age, the old lore, Heroes and Will and all that are being relegated to myths and stories.
In the first Fable, the lore and magic was strong and central to the game, but by the time Fable 2 occurred much of that lore, like the Hero bloodline and Will powers, had become diluted and left in the past.
Some of the books you can read in Fable 2, like "Avo is Dead", hint at the secularisation of Albion. It's quite apparent when you see how the Temples of Skorm and Avo have become the Temples of Shadows and Light, the former being more of a joke cult for rich and stupid hedonists and the latter being viewed with equal disdain as meddling wishy washy do-gooders.
The old Gods are no longer being worshipped and personified but instead have been reduced to just the concepts of Light and Shadow, Good and Evil.
If you want to play a game where the lore is still relevant and strong, you'll have to play a game further back in Albion's history and closer to the original Fable.