Quote from VOA:
Hugo is an orphan who lives in the shadows of a busy Paris train station, continuing the work his father taught him: keeping the many clocks running on time. The secret message is hidden within a man-shaped machine from his father's cluttered workshop.
Another orphan, Isabelle, holds the key - literally - to Hugo's automaton, and it leads them on an adventure into the world of the great French film pioneer George Melies.
Adapted from Brian Selznick's novel "The Secret of Hugo Cabret," the story was personal for director Martin Scorcese who, as a frail young boy, spent long hours in his local cinema.
What does "literally " mean here ?
It means that there is actually a key. It's not a metaphorical key.
I'm not a teacher, but I write for a living. Please don't ask me about 2nd conditionals, but I'm a safe bet for what reads well in (American) English.
By adding the word "literally" is means that she hold a real key. (probably a reference to the key needed for the winding of the clocks in the shop)
If the sentence did not have the word literally it would read:
"Isabelle, holds the key to Hugo's automation . . "
Then it would mean she is an important person.