Is it true that most monsters of his labors are exaggerated, like the hydra monster that turned out to be warriors with masks of serpents as it is shown in the 2014 movie, Hercules?
No. The Library by Apollodorus, our main account of the myth of Hercules, does not mention anything about the Hydra (or any of the other labours) being "imitated" or "faked":
As a second labour he ordered him to kill the Lernaean hydra. That creature, bred in the swamp of Lerna, used to go forth into the plain and ravage both the cattle and the country. Now the hydra had a huge body, with nine heads, eight mortal, but the middle one immortal. So mounting a chariot driven by Iolaus, he came to Lerna, and having halted his horses, he discovered the hydra on a hill beside the springs of the Amymone, where was its den. By pelting it with fiery shafts he forced it to come out, and in the act of doing so he seized and held it fast. But the hydra wound itself about one of his feet and clung to him. Nor could he effect anything by smashing its heads with his club, for as fast as one head was smashed there grew up two. A huge crab also came to the help of the hydra by biting his foot. So he killed it, and in his turn called for help on Iolaus who, by setting fire to a piece of the neighboring wood and burning the roots of the heads with the brands, prevented them from sprouting. Having thus got the better of the sprouting heads, he chopped off the immortal head, and buried it, and put a heavy rock on it, beside the road that leads through Lerna to Elaeus. But the body of the hydra he slit up and dipped his arrows in the gall. However, Eurystheus said that this labour should not be reckoned among the ten because he had not got the better of the hydra by himself, but with the help of Iolaus.
As should be expected, popular fiction isn't always an accurate representation of Greek mythology. If you would like to learn more about Hercules, here is a list of all the times he was mentioned in Greek literature.