There are two reasons to have a tag:
To describe the question along one dimension -- from the front page people can see the title, tags, and the first bit of the body, and on that basis they decide what to read. In my experience, more-specific tags are more useful here than general ones.
To help people find questions of interest. In my experience, broader tags are more useful here, as there's nothing that aids discovery of related tags. (If you're interested in fiction in general and you've ended up in mystery, there's nothing that leads you to fantasy for more.)
These goals are at odds with each other and SE doesn't support hierarchical tagging, hence the problem.
Further, if a tag applies to half or more of the questions on the site, its utility as a way of filtering the content is suspect.
When tagging a question, consider whether, at its core, this is a question about a genre, a question about fiction in general, or both. For example, a question about writing dialogue should probably be tagged fiction (among other tags of course) even though your particular story is a fantasy. That it's a fantasy really doesn't affect how you have your characters talk to each other. On the other hand, if your question is about representing non-verbal languages (like cephalopods' color-based dialogue) in a conversation with humans, that's better tagged fantasy; while some information might transfer to other genres, it doesn't really apply to fiction as a whole.
So, use a genre tag if the question is genre-dependent, use the fiction tag if it's generally applicable, and if both seem appropriate (we cannot possibly anticipate all cases), use both. Tagging is somewhat organic.
To go along with this, let's make sure the tag wikis are top-notch. The fiction wiki should say it's for issues that cut across all types of fiction and it should list all our genre tags. Genre-tag wikis should point to related genre tags if relevant and always also point to fiction. Let's make sure we provide good navigational breadcrumbs.
As for retagging, let's not try to retag hundreds or thousands of questions at once. We can be more pragmatic about it: if (after we agree on our goals and guidelines) you see a question that's mis-tagged, fix it. This especially applies to the front page, but also duplicate targets, related questions, or just anything you come across in your normal use of the site. If there's anything else obvious that can be improved at the same time (like unclear or typoed titles), try to get that too.
creative-writing seems over-broad to me. It's not just fiction; poetry probably also qualifies. I haven't reviewed the questions on the tag, but it feels superfluous. (I wonder how many questions have only that tag, but don't have time to apply SEDE at the moment.)