The "It was all in the main character's head" theory is so played out. Come up with something else.

princess peach is a demon from another dimension who is manipulating Mario into destroying the few original inhabitants from the land she wants to conquer, for this purpose she imbue him with her own evil flame which he uses to destroy Peach's enemies, as his quest goes deeper and deeper Peach sometimes loses control over Mario's delusions, this derivatives in unintended effects like making him believe he is in a giant board game or flying in outer space, as his actions produce more consequences more demons start taking interest in Mario since he, being a foreign entity can accomplish such acts without the bindings to the laws that rule entities native from that dimension with relatively few effort to control Mario himself. Sometimes he regains consciousness and will on his own mind, and can't but feel horrorized of his acts, but he never gets the chance to fully react when one of the many demons on that realm take over him, manipulating him into interest beyond his mortal perception. this is why there will be always a Bowser, always an artifact to rescue, always a supernatural ability that will lead Mario to his goal, but overall this is why Mario will defeat by himself hordes of enemies without blinking, without remorse and without looking back.