the explanation is the thing that's claimed to have truth value but it's complete bullshit.

The truth in this example is that you can make iron stronger by adding bones. Being incorrect about the process doesn't make the result any less truthful.

Observing a process and not having an explanation for why exactly it works is not beyond anything

In that case, it's elephants all the way down. I can understand how trees work and discover new things about them without understanding how sub-atomic particles interact in their leaves. You think having no understanding of the underlining phenomenon makes the things you observe and discover above it untruthful. But everything we know about the universe today relies on principles we don't understand yet. By your own definition, all of modern science is false because we haven't yet filled in certain gaps.

the story they made up isn't finding truth at all.

Was the Plum Pudding model just something J.J. Thomson made up? In a historical epoch in which ghosts, werewolves, and gods were presumed to exist, this was an extremely logical explanation. Being wrong doesn't mean these people were just guessing and talking out their ass.