Love this phase! My 6-year-old daughter is in it now.
Your son seems to be a bit more creative with his stories so I don't know if this will work, but with my daughter, when she tells me stories that seem out of the ordinary, I just ask if it's for real or 'pretend for real'. Then we have to talk about how it's great to tell stories, and people will love to hear them, but it's always good to know if they are for real or not. I even talked about how there are lots of books called 'fiction' that are 'pretend for real' books and then there are books that are all 'for real.' So this just prove to her that the pretend is okay, but people want to know which is which.
As far as starting school with these stories, just alert the teacher(s) of his bigger than life stories at the beginning of the year so they are aware of it. You can give examples of his stories to give them an idea of his creativity! Also let them know that they can talk to you AT ANY TIME to verify his stories, and that you'll do the same. This let's them know that the lines of communication are open and you're willing to work with them to keep tabs on his stories.
Good Luck
J.