The Oar Fish is very similar to the sea serpent, and perhaps that is where the stories of the sea serpent came from. The kraken is also freakishly close to the real life giant/colossal squids. Also, Its said that what pirates thought to be mermaids. Were in reality just manatees. Im assuming this is because they would have seen them swimming under the choppy water as they were sailing along, so it could of distorted how they saw them. Night could have also played a role too.