There is indeed a thing as "too much" imagination. This is where someone devolves into fantasy land for a period of time whereby these experiences they witness are totally internal confabulations of their minds.
I was subject to these things at one time early on in my young adult development.
So otherwise, the human ability to form mental images, concepts, or ideas of things not present is what we call imagination. Beyond fantasy land it is an ability to gain creativity, problem solving, and innovation by the envisioning of things not yet extant.
Today is National Imagination Day.
It is observed each January 19th since 2024 under the auspices of the National Day Calendar to promote unleashing our creative abilities, explore new things and ideas and to celebrate the power of imagination. This in the name of innovation and personal growth.
The crux is inventive thinking and those unseen concepts which exist but only in synapse resulting in a more creative brain.
I hope you'll take a moment to exercise your imagination. Temper it comparatively with what actually is and you'll go far toward honing that creativity which is within you.