What I'm saying is simply that as you describe it, you are first writing the code normally, and then separately writing some documentation about it accompanied by code snippets for context.
But if that's Literate Programming then everyone is doing it and it's not a very meaningful label, it's just documentation.
I do get it, the distinction is that you are using NoWeb and you can convert between the documentation and the code, and that the documentation contains the entirety of the code. I suppose that's neat.
At some point, this boils down to a pointless discussion of semantics (my fault). "Literate Programming" as you describe it does not sound like a style of "Programming". Actually, when you reverse the Programming/Writing emphasis, it simply becomes "Technical Writing", which is what everyone does, because that's what's actually needed. And it is done by great writers rather than great programmers (which may describe Knuth, with the upmost respect).
I always interpreted it as writing the text and the code together, logging your thought process, thinking of code like a piece of literature as it is written, rather than adding some documentation to it later. The notion that writing it like this will yield better code, regardless of its value as documentation. I suppose that's why it was unproductive for me, it is a rather romantic interpretation (again, my fault).