I recently realised that parables were stated as parables or stories before the parable was told. In this case that doesn't happen. (go and reread carefully to see what I mean) So it can be assumed that Jesus wasn't giving us fiction. Why make this point? The "story" is more then an illustration.
You also stated that the rich man wanted his family warned more. Rereading the story shows that he asked for water to cool his tongue first and thought of family second. It's more that he wanted the poor man to still serve him then it was to show mercy to his family.
There is no way to truly dismiss the disturbing reality of hell. Though I'm more then certain many persons will continue to try, as they have in the past.