I don't know about Islam in general, but in Pakistan such a denial sounds like a prosecutable offense. ("Outraging religious feelings" at a minimum and maybe "defaming Prophet Mohammed" if Mohammed's example was cited and criticized.) So yeah, in Pakistan "no muslim can deny the fact" - upon pain of death! If not enforced strictly now, what prevents it from being enforced strictly in the future? Two or three generations of that and what remains of Islam in Pakistan?
illeteracy is also wide spread in pakistan so yes many people are illeterate. even then minorities in pakistan are more safe than minorities in india, where minority consistes of a big portion. laws for minorities and muslims are same, but govt in corrupt, it fails to safe guard the minority just it fails other common pakistani.
the blasphemy laws should not be changed for it is also important aspect of an islamic society.
there is a story we muslims are taught which shows the respect of minorities among muslims, one night prophet abrahim(abraham) in lingering in the night when he sees a nonbeliever, prophet ibrahim was known for his hospitality, but for the non believer who is also hungry refuses to take him as a guest, allah speaks to him and say why has he refused that man, every human regardless of faith is created by him, when prophet realizes his mistake he quickly approaches that old person and says you are welcome, the old man is surprised and the prophe tells him the whole story. the old man nonbeliever is astonished and becomes a muslim.
the prophet muhammad(pbuh) was troubled by non muslims from mekkah, they forced him to leave mekkah, his beloved home town and killed many of his companions just because they followed what he made them believe, even attempts were made to kill him, he was treated unfairly, but still he forgave every person in makkah when his companions conquered it.
he made treaties with jews that they could live harmoniously with the muslims, provided they dont collaborate with the enemy, but in ghazwa khandak or tabuk, the jews of madina collaborate witht the enemies and finally prophet orders the culprits to be killed and askes others to leave.