"Is the idea that Jews are literal monsters part of someone's culture and identity?"

The idea that some people may believe that is central to some cultural identities. For example the Hasidic community, or the defense/military posture of Israel.

Yes. Jews have been treated as literal monsters for millennia and the rest of the world has lived with it.

https://en.wikipedia.org/wiki/Expulsions_and_exoduses_of_Jew...