What are some examples of the blending of classical/"pagan" literary and cultural references with Christian/Biblical ones in The Faerie Queen and how does Spenser incorporate both the Bible/Christian belief with classical thought and mythology?
There are many examples of the blending of classical/"pagan" literary and cultural references with Christian/Biblical ones in The Faerie Queene, particularly in Book I. In fact this book is often used as an example of religious allegory as it subtly references the divide between the Catholic Church and the Church of England in Reformation times in England.
The heroic deeds of the Red Cross Knight can be seen as an allegory for the struggle of "pagan" man (often symbolized as some kind of dreadful "beast," as in Beowulf) between the forces of primeval "elemental" sin and the higher form of spiritual aesthetic piety. Pagan beasts were often used to depict the overpowering sensory forces, drives and impulses of the "flesh." The book also hints at the birth pangs of a new Protestant England trying to counteract the threat of Catholic countries such as Spain and Italy.
The Red Cross Knight leaves the House of Pride (an ungodly pagan pit of sinfulness) to the House of Holiness, where his spirituality and Christian virtues are rescued and refreshed. Here we have pagan "darkness" coming into the "light" of Christian enlightenment. Snakes, lizards and reptiles were often used as strong pagan symbols and are redrawn to monstrous proportions with every retelling of old pagan/early Christian tales (Beowulf, George and the Dragon) and this can also be seen here as the two themes weave together in one tale. For example, the King and Queen of Eden (Adam and Eve or the father and mother of Una), live enthralled by a fearful dragon. The pagan fear and mistrust of all loathsome (little understood) life forms blends with the Christian idea of Satan vs God.
Pagan myths and legends existed in many countries of course, not just in England. In the Classical myths of Greece and Rome there were many protagonists facing epic journeys of self improvement where they had to develop character in order to beat fear, sensory temptation and greed in order to gain virtues such emotional regulation or temperance. The Minotaur, the Medusa and the Cyclops are all horrific creatures symbolizing evil against good. Education was rare among the general population at that time, but audiences would have been familiar with many of these stories through the oral tradition of endless retelling and through the blending of different stories to make new ones.