I agree with HK in that nonliteral language interpretation is a learned skill. As parents, it's easy to be guilty of contributing to the problem, because we know our children need literal instructions at a very early age, and that can be a hard habit to break. It's not like there's a "Figurative Day" marked on the calendar that announces it's okay to change your style.
It's not something my DD8 seems to have an issue with, but she's being raised in a family where spoken language is regarded as a plaything. It's common to hear nonsense rhymes, made-up songs, and invented slang in our household. We do this because it's amusing to us, but it also accidentally teaches DD to look at language from a more nuanced perspective.
Exposure to pop culture also helps.
DD has been studying idioms this year as part of her 3rd grade curriculum, too, as part of state requirements. Don't ask me why "the bees knees" is required, though.
