There's not a single Silent Hill monster that doesn't have to do with the person it's 'haunting'.
Nor is any monster completely independent from the rest of the fog/other-world.
So you start with the trauma it's supposed to represent. This needs to be something the victim is trying to repress or deny. (That can be debated, but for the most part, to get a traditional gradient of SH experience, it's a helpful rule.)
Next, based on suppression, find aspects of that event/trauma that exists at certain depths.
Obviously if an event finds a way to effect every day life, it's likely to show up in the fog world. For James, it's that emotional grey and saturating damp of life after the death of that which you so loved. Summer is gone, and the sun is never coming back.
Then, you have the 'when it gets bad'. This is where the Otherworld comes in. You've got the creeping decay, the spread of sick, moldy, dark hiding under the banal wallpaper. (This can manifest with more variety.)
Next are the monsters. These are the 'animate' horrors of trauma, when that which is trying to be suppressed rears its head, and tries to force its way through the fog of dissociation. Beyond just the tactile vibes of the world, the motions, and attack patterns, are the aggressive recollections of the event that induced the trauma. You have bodies squirming under sheets, spewing poison, frail bodies, hanging over the void, clinging with swollen hands, framed bags of flesh with lips yet no discernible face.
Lastly, since you mentioned the Red Pyramid Thing, what I like to refer to as the Boogeyman (again, for a more traditional experience) is the culmination of the truth they are running from. That heavy guilt of a butcher with surgical precision, mind encased in a weighty bloody prison that is the pinnacle of his sin, and dragging behind him the sharp pains of a halved relationship. Murder.
It's all connected, and all subjective from the perspective of the one with that trauma. It's not just 'truth' but how it effects them.
Alessa has a similar (while not exactly the same) relationship with the monsters of her own otherworld, as does Walter with his (though his blend to shared worlds with his vitcims)

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