I think that there was a flood, a large one but that it was localised. When the bible speakes of the 'earth' being covered by water it could mean just the area known at the time. The earth as we know it took thousands of years before all of it was discovered. I think the flood must have been somewhat significant because of other myths and legends about it in other cultures. As for the animals, maybe it was just the few known in that area too. Perhaps even just domestic animals.
What has always bothered me about the story (even as a JW) was how did Australia come to have all the marsupials (bar the oppossum in the Americas). Why are nearly all the indiginous species of mammals in Australia either marsupials or monotremes? If the flood was global then this would have been impossible.
The logistics of feeding/cleaning up after all those animals didn't make sense to me either.