Will a person who lies a lot in their speech by embellishing talk and stories be punished, even if their lying does not reach the level of a false oath or fabricating Hadith about the Prophet (peace be upon him)?

Lying is one of the most reprehensible traits. It can lead its perpetrator to major hypocrisy. Even if its only punishment were to be written down as a liar in the sight of Allah, that would be sufficient. The truthful person's truthfulness guides him to righteousness and then to Paradise, and he is recorded as a siddiq (truthful one) in the sight of Allah. As for the liar, his lying guides him to wickedness and then to the Fire, and he is recorded as a liar in the sight of Allah. Scholars urge people to pursue truthfulness and warn against lying, because a person's habituation to lying makes him known by it, and Allah records him as a liar, and the opposite is true. The meaning of "recorded" here is that it is decreed for him, and he deserves to be described as belonging to the rank of the truthful ones or the liars. This becomes manifest to creation by Allah casting that into the hearts and tongues of people.