I’m not sure lying to your kids about sea monsters to the point that your children are so petrified of the water they don’t go near it is quite as benign as they believe.
I bet there is a certain delicacy to telling the stories as allegories so that you can transition them from fantasy to rationality as the kid grows.
For example, the "sea monster that swallows you and brings you to another family" sounds like an allegory for "the water will drown you and bring you to the afterlife / death". If you respect your kid's intellect, I bet that you can explain that connection to them once they're getting too old to believe myths, while still holding onto the emotional connection.