For the difference between Narrative text and your real story, I think Narrative text is imaginary, which means it is not a real story, and it is more like a legend or something. The purpose of the text is to entertain, to amuse the readers. As for the 5 paragraph rule, I don't think it affects you much in terms of improving your writing skills as I think the only good point is that it requires you to write carefully, selecting which part of the story you're going to write is needed.
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