Just a few points:
If man is born from the universe, we are a product of the universe.
This much is certain.
don't be so certain! I would recommend looking at the work of philosopher Immanuel Kant, as well as those in the 'neo-Kantian' tradition for some compelling reasons why this is not a certainty. As an entry point I would consider the possibility that the entity designated by the term 'universe' may be what it is to you because of the perceptual apparatus which your being brings to the act of its perception.
How can man fabricate the abstract and fictional despite being born of
the Universe which is concrete and non-fictional?
David Hume I think provides a great explanation when he observes in The Principles of Human Nature that the principles of association governing the relations of ideas to ideas are simply not the same as the laws governing physical phenomena.
For example let's say I would find a night sky more beautiful if I
could see the lights of the next closest galaxy. This is impossible
due to physical limitations (atmosphere interference, human eyesight
limitations, etc), but any person can comprehend the idea and paint an
image of it within their own minds.
Given the fact we can demonstrate the existence of other galaxies empirically, I fail to see how this relates to the question of the possibility of fictions?
Is it strange that the mind, which is born out the universe, can
conceptualize physically impossible things?
Indeed it is strange. But is it not also evolutionarily advantageous to be able to envision things being other than the way they are?
Why are we able to think
of things that cannot be factual despite being born out of the purely
This is a good example of what is often referred to as 'mistaking the map for the territory'. Your being born refers to a physical phenomena, and was not the product of two abstract facts copulating. It is a fact that you were born, but in order to be recognised as a fact, it first has had to have happened.