If one wants to be a strict literalist, elohim means gods; ha elohim means “the gods.” Sometimes in the Hebrew text it is translated thus, sometimes as God—this seems to be both an exegetical-grammatical and a hermeneutical (interpretive) decision. On the grammatical front, for example, in some passages, the verb-form linked to elohim is singular. I don’t know enough to know if this is true in the oldest extant texts or not; I don’t know if it was ever a hermeneutical re-writing based on theological considerations. Biblical Hebrew is an archaic language. Most study Bibles have footnotes that often say something like “Hebrew uncertain” or even “Hebrew unknown.” When translating those phrases, the translators have to make their best guess, often going with the decisions of previous translators.
Rabbinical Judaism is fundamentally a hermeneutical religion. Interpretation is recognized and encouraged. For example, in the story of Abraham and Isaac, it is ha elohim who tell(s) Abraham to sacrifice Isaac, and YHVH who stops him. One interpretation by a rabbi that I came across was that Abraham’s act of faithfulness was in listening to YHVH, rather than carrying out the traditional sacrifice of the first-born by a tribal leader to the gods, to ensure prosperity for the people. Does the text support this reading? (A good rabbinical shrug)—Well, it can.* Another interpretation by another rabbi, given in a talk I heard, was that Abraham was tested by God—and failed! No just man (tzaddik) would sacrifice his child, even if commanded by God! (Remember, the Jewish covenantal relationship with God is not one of submission.)
Sometimes a “hyper-literal” reading can produce interesting results. For example, in taking both the word order, singular verb form and plural noun with strict literalness, the 13th century Jewish mystical text the Zohar reads genesis 1:1 as follows: “In the beginning [ ] created gods, the heavens and the earth,” where the blank represents the ultimately nameless God.
Another reading would be: “In the beginning created God, [then] the heavens and the earth.” What was the first “thing” created? “Beginning.” (There is a Hebrew blessing: Baruch atah Adonai eloheinu, melech ha olam, oseh ma’aseh v’reisheet, “Blessed are you Adonai our God, sovereign of the universe, who makes the making of in-the-beginning.” )
These are just to give you a flavor. Rabbinical Judaism insists that the Hebrew itself does not permit of a one-and-only-true meaning, and Jewish hermeneutics keep the possibility of multiple, even new, meanings open—sometimes quite playfully. You’re not really studying Torah if you don’t bring your own torah to the task (also, traditional Torah study is done as argument between at least two people).
The only real creedal statement of Judaism is given in Deuteronomy 6:4: Shema Yisrael, YHVH eloheinu, YHVH echad!, generally translated as “Hear, O Israel, YHVH our God, YHVH is one (echad).” Beyond this statement, Jews have varying concepts of God: transcendent/immanent, personal/impersonal, theistic/monistic,** masculine/feminine, etc., etc. Jewish scholar David S. Ariel, in his What Do Jews Believe, says: “Each of these views is an authentic Jewish view. They are authentic because they are honest attempts by Jewish thinkers to explore ideas about God within the context of Jewish tradition….Perhaps the diversity of Jewish points of view on God demonstrates that genuine certainty and knowledge of God are impossible….Judaism is a spiritual force whose sacred myths and ritual; are based on successive attempts throughout the course of human history to find answers to the fundamental questions of human life and its meaning. Each generation understands God in its own terms and based on what it has received from earlier generations. The sacred myths generated by Jews throughout history are the ways in which our people have struggled to make sense of God and how God relates to us. The sacred myths, the bedrock of our deeply held beliefs and convictions, will continue to be refined, modified, revisited, and reformulated.” (p. 14; my italics)
In light of statements like these, for Judaism the question of henotheism among the people of Israel is undoubtedly a historically and hermeneutically interesting one—one to have a good argument over!—without being too worrisome.
* Note: as Wulebgr has pointed, there are four different textual strands woven through the Torah: the Yahwist (J), the Priestly (P), the Elohist (E), and I think the Deuteronomist (D).
** Think the “perennial philosophy,” ala Advaita Vedanta; this is how I always use the term.
EDIT: Re the Abraham/Isaac story: one rabbi that I read psychologized the whole thing—elohim and YHVH representing unconscious archetypes (which is not too far from the kabbalistic understanding of the story). Also, Rabbi Lawrence Kushner, in his book The River of Light suggested that “unpacking” the texts could be a lot like interpreting dreams…