How do you balance creative story telling with historical accuracy and how do you balance American exceptionalism against sounding like propaganda?

The word ‘balance’ tells you how you do it in both instances. You do the balancing yourself and you choose how to do the balancing act.

For the ‘propaganda’ part of the question, I can’t say it often enough. Use deep point of view, using the word ‘I’ if necessary for the first draft in order to get deep into the character’s mind. If you can do this, then sounding like propaganda isn’t a problem because you will be telling the story… and describing America… through that character’s eyes and if that character doesn’t think of what he/she is saying as propaganda, then neither will your readers.

The other point, balancing historical accuracy with storytelling is where the ‘choice’ truly comes in. If 10 writers are shown a scene and then asked to describe it accurately, you’ll get 10 different descriptions because they each see the scene differently. Same with history, which is a living, breathing and changing thing. Only the dates and who won or lost aren’t subject to interpretation. If you choose to change those things, then it’s a good idea to tell you reader in a ‘forward’ what you are doing so you won’t be inundated later by readers pointing out your inaccuracy.

Anyway, that’s the way it’s worked for me, though, to be honest, one of the reasons I love science fiction and fantasy is that I don’t have to worry about such things.