Literatura means "literature." It's an interesting choice for a pop song, as it's not a word you typically hear in everyday conversation or popular music.
In the song, Jão expresses a preference for the idealized world of literature over the harsh realities of life, singing, "A vida é linda, mas prefiro ainda literatura" (Life is beautiful, but I still prefer literature). This highlights a desire to escape into stories where he can rewrite his own narrative and have a happier ending.
Jão opens "Literatura" on the body: "Ossos, gritos" (bones, screams), then swerves into scripture: "Versos bíblicos" (biblical verses). That whiplash is the whole method of the song. Something ended, and instead of describing it plainly he keeps reaching for words big enough to hold it. By the second verse he's already rewriting the breakup: "Que mudaria o rumo cruel dessa história" (that would change the cruel course of this story), imagining a better sentence could undo a real ending.
He says the trick out loud in the bridge: "Dispenso a verdade, tão fria e tão crua" (I dismiss the truth, so cold and unforgiving), "a vida é linda, mas prefiro ainda literatura" (life is beautiful, but I still prefer literature). Then he builds the life that never happened, a table where "a nossa família, o sol na cortina e você aqui" (our family, the sun on the curtain and you here) all sit together. He knows it's invented. The last line says so without apologizing for it: "Eu não vou, eu não vou, eu não vou" (I won't go, I won't go, I won't go).