Was Jesus of Nazareth a religious loon?

[Vicki Q]

Jerusalem was a small village?

The Massacre of the Innocents was set in and around Bethlehem, which was a small village.

If the evidence isn't there that it did happen,

Translate: 'If there is no evidence it happened.'

Matthew is an evangelistic document that needs to be treated carefully when discussing historicity neutrally, but we have tools for doing that and it is a perfectly normal and valid historical source when used in that way. We therefore do have evidence.

the arguments against aren't exactly conclusive either.

I can't follow this, but this is always the problem when trying to parse treble negatives.

I mean that the arguments used to justify the claim that the Massacre is a fiction are also weak.

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Are the above events historical?  If not, why not?  Or, why so?

The Infancy Gospel is generally dated to the mid to late 2nd century AD, so it's value as a historical document is extremely limited. That's not to say that it has none at all, but it's particularly weak evidentially.

Furthermore, there is a lack of consistency with various central aspects of Jesus' ministry, such as the lack of a Kingdom declaration in the miracles which make the bulk of the narrative.

So no.