When listing our personal achievements, most of us are tempted to embellish a bit to make the honor all the more impressive. Making the story more interesting or intriguing is usually harmless, but when that 10 inch bass caught on the last fishing trip grows to the size of the dining room table, the story has exceeded simple embellishment.
If the idea is to present oneself in the best possible light, use of impressive and descriptive words are expected. Also, there is a tendency to emphasize your contribution in the telling of the story. Where the narrative that is the college application file goes too far is when the story is no longer embellishment; the story is fabricated.
What I have seen from helping students with college applications from my teaching years to present day is that most students are terrified of making a mistake on their applications. This is not a major concern for someone who is prepared to tell an outright lie. Were we able to trace the lie back to its source, we would typically find an adult at the end of our investigation.
No matter the source of inaccuracies in the application file, incorrect information can hurt the student as well as the institution. Consider a scenario in which you are the supervisor for an automotive shop. You need to hire a diesel mechanic. Of all the applications, one stands clearly above all the others. This person is exactly what you imagined a perfect applicant should be. When you begin to check the certifications, former jobs and references the shine on this candidate disappears quickly. Some of the shop work was in a lawnmower repair shop and two of their three references are relatives from that lawnmower repair shop. Even though there is some history of auto mechanics experience, it has been on gasoline engines. The diesel mechanics experience boils down to the completion of one semester of a two-year program at a school specializing in diesel mechanic repair. Even though this person may have potential for doing the job you require at some point in the future, they cannot do the job you need them for today.
College is like this diesel mechanics job. Your grades, test scores, writing ability, activities and reputation are the requirements for the position. Apply for the job/college you are qualified to do/attend.