Sentence:  This was the heyday of street begging 'characters' when French war veterans, real or bogus, played on the public's sympathy with ghastly wounds (real or fabricated), and a later generation looked back on it nostalgically undoubtedly exaggerating and <WSD>rose-tinting</WSD> the reality. 
Meaning of the word marked with <WSD> tags:  To look through rose-tinted glasses at; to view or describe as better than it actually is or was.