Haha, there's certainly a bit of that going on.
For quite a long time a lot of events were written down and communicated via Broadside Ballads: https://en.wikipedia.org/wiki/Broadside_(music).
Broadside Ballads often described events and people and were usually written to be sung to common tunes that the public might know. A lot of the ballads became folk songs over time and the lyrics/stories/tunes changed, but they're often still traceable back to their roots. So where a ballad might describe an event pretty plainly, the songs derived from it will most likely embellish and romanticise it.
The Bodleian Library in Oxford has an online collection of Broadside Ballads that is very well maintained: http://ballads.bodleian.ox.ac.uk/. I found the following whilst seeing if there was anything related to Moreton Bay, and although it only shares the namesake, this is quite a good example of how the ballads were written: http://ballads.bodleian.ox.ac.uk/static/images/sheets/15000/....
A good example is the quite famous folk song Scarborough Fair, which is one of a number of variations descended from a ballad called The Elfin Knight: https://en.wikipedia.org/wiki/The_Elfin_Knight.
My knowledge is mostly limited to English and related folk music, so I'm not sure if there's anything similar elsewhere, but it's certainly an interesting subject and it can be pretty fun to take a song and see if you can find out the original story :)