She’s probably exercising her vivid imagination because she wishes she had more siblings and adventures. In person or in a note, tell her you like her best when she’s honest with you. Can’t be that direct? Tell her people who make stuff up are hard to trust, and that you like sincere people who tell the truth. Maybe she’ll get the hint. Since she is probably insecure, consider building her up by praising her on qualities you like in her. If she doesn’t change her ways, decide whether to accept her as is or hang out with more believable buds.