What if religion was created based solely on the fact that humans have an inherent fear of death, and have the need to be something more than human, because they're not satisfied with the mortal state we are in right now? I'm religious person myself because there's certain things I can't explain, I'm more referring to Greek, Roman, Celtic, Egyptian, etc...
Your idea that religion is a reaction to fear is echoed in Marx's famous "Religion is the Opium of the masses". Marx didn't reference fear of death in particular, but suffering and pain in general, which presumably includes fear of death. The idea is that life is painful, and people use religion as an anesthetic, the way they use drugs to forget physical pain.
Freud later develops ideas very similar to yours in his writings on religion, especially in his book "The Future of an Illusion". He states that religion was created as a form of wish fulfillment. People invented religion because they were desperate to believe that their soul was immortal and was going to live on after their death. Another reason Freud mentions, related to the one you mentioned, was that people created gods as a longing for father figures. As adults people subconsciously longed for the protection provided for them as children by their parents, but their parents were dead (or dying soon), so they invented gods as transcendent and eternal father figures who they felt would always be their for them.
More generally Freud saw religion as a defense mechanism agains the sheer randomness and cruelty of life, a way people coped with the fact that nature was far more powerful than they were.
Ernest Becker takes this a step further, and claims in his 1974 "Denial of Death", that most of human civilization, not just religion, is one elaborate psychological response to the fear of death.
First, to address the premise of the question of whether psychological reasons (such as fear) explain the origin of religions in general or a religion in particular: Peter Kreeft, in Does God Exist?, explains:
When is it reasonable for us to look for such psychological explanations for the origin of an idea? Only after we know, or think we know, that the idea is false. We don't give psychological explanations for the origin of the idea that 2 + 3 = 5 or that the sun is round. Thus the Freudian argument begs the question. The God-question cannot be settled that way, psychologically.
So, we have to be careful: to ask about psychological explanations assumes the idea is false.
To take your question then about the Pagan religion: assuming (for the sake of argument) that the Pagan religion is not correct, is it right to say that it grew out of a fear of death or a desire to create morality in society?
Augustine, in City of God, argues against this. Much of the first part of the work argues that there were no moral benefits to the Roman worship of the pagan gods, devoting an entire section to arguing "That the Worshippers of the Gods Never Received from Them Any Healthy Moral Precepts"
Thucydides would probably argue in favor. Thucydides seems not to have been religious himself, but depicts how disregard for religious custom during the Peloponnesian War war lead to atrocities.
It seems plausible that religion mitigates for some people the fear of death. Though, that's not the main effect.
The whole issue of the Journal "Personality and Social Psychology Review (2010)" deals with the question "Why Does Religiosity Persist?"
For an introduction into the subject and a brief survey of the single essays see Constantine Sedikides: "Why Does Religiosity Persist? Quoting from his introduction:
Special issue articles share four commonalities. First, they ask “why” questions. Why is religiosity so important to so many people? Why is religiosity important to some people and not to others? What are the functions that religiosity serves? Second, they take a theoretical approach. Contribu- tions draw from established theories to understand and explain diverse aspects of religiosity. Third, they focus on social and personality psychological approaches to religios- ity. Finally, they try to accomplish several specific tasks:
(a) to outline the theory that underlies their argument, (b) to provide selected empirical demonstrations of the theory’s veracity from the social/personality psychological literature, (c) importantly, to discuss empirical findings that are directly linked to the phenomenon of religiosity, and (d) to draw implications for future empirical pursuits
Notably I recommend the essay Kay, Aaron et al.: Religious Belief as Compensatory Control. Personality and Social Psychology Review. 14(1) 37-48, 2010. The references of that paper point to several recent papers about the whole subject.
I would not say that fear of death can be identified as the primary motive for religions, though it has surely played a part.
My reason is simply anthropological. Unless you define "religion" as tautologically assuming an "afterlife," there are religions, or systems of divine entities, entirely lacking in the rewards of heaven. The Greeks were by no means unanimous on this, and Buddhism, while not a monotheism, seeks absence of afterlife through the guidance of divine entities. In Egyptian religions, the concept of "afterlife" apparently underwent a kind of democratizing process, applying at first only to the pharaoh and then eventually to everyone.
Arguably a more universal source of religion is the very impulse you cite, the impulse to explain and predict. The Gods are causal forces that have not only "efficient causality" but "purposes" or final and teleological causality. Which makes sense. How else would we be able to investigate why and how these intangible forces go about things? We may find between their "reasons" and our own some similarity or correspondence to be worked out.
Such enticing correspondence between the way the universe works and the way we think and reason is also the gateway into science and survives vaguely in such ideas as Wigner's "unreasonable effectiveness of mathematics" or the "anthropic principle" or even Einstein's "god does not play dice with the universe." These, of course, hold no brief for some Levitical patriarch in the clouds. Yet they note the dialectical, reflective, or discursive nature of our being in the universe.
Death is certainly one of the questions that arises. The individual appears to utterly cease, yet we are also aware that the mortal individual transmits the "immortal" regeneration of the species...as well as the "other species" we consume.The finite lifespan is clearly transcended in some sense, and individuals are also "remembered." But if we are an "effect" of species being, what "causes" the species? What is its purpose? How else could we ask that except in some sort of "dialogue" with the universe? And how could we picture this as a dialogue if we heard only random static on the phone line?
In short, to take a purely physicalist stance and see the whole of religious narrative as a psychological distortion "caused" by fear of death is crude, preposterous, and evidentially dubious.
Then no-one would believe it; it would be an ersatz religion; religions to have any value are an organic outgrowth of a people.
This is why Scientology, which is legally a religion in the states, doesn't properly count as a religion in the study of religions - more of a cult.
Your argument is in Lucretious, and he is careful to invoke both gods, and God - for want of a better name.
Perhaps he was hedging his wager; what if he wasn't?