There are various perspectives on the subject. One is the spiritual side of what mental illness is. From the purpose of developmental problems to behavioral imbalances.
The scientific side is very real. From here you get even more perspectives. Everything in science are "theories", experiments, empirical evidence. When I was studying Psychology in college and I got into the serious classes about experimental psychology, we had a saying "Correlation does not imply causation". So when we are talking about the various mental illness as described in the DSM-IV, many things are "theories" based on studies.
There are various groups within the mental health community. From Psychologists to Psychiatrists. To the "anti-Psychiatric movement" (which I favor) to deinstitutionalization.
Here is my personal belief (and personal experiences). There are people born with a genetic predisposition to mental illnesses. Not all will develop them. Some people are more resilient than others. Some may experience stressors in life which will cause those mental illnesses to be developed. (stressors vary from trauma, a severe life changing event or events, drugs, alcohol, poor living situation, stressful home while children, abuse etc).
The point is what to do when there is a mental illness. Some people will avoid therapy at all costs and may opt to feed the pharmaceutical industry by taking medicine. I strongly disagree with this unless one has a serious mental condition that requires medication (like psychosis, bipolarity, severe depression and only temporary meds and schizophrenia).
There are MANY mental disorders than can be successfully treated with therapy ALONE! The problem is that there is too much "stigma" at getting therapy. And it is costly- plus medical insurances discriminate against people who have gone to therapy.
Ultimately, you have people who just do NOT want to face their troubles. But anything from anxiety to compulsions to depression to phobias etc... can be effective "cured" or completely controlled by seeing a psychologist .
Even the illnesses that require medication (like psychosis) benefit greatly by taking medication along with therapy.
But how can anyone ever look at a person with schizophrenia and ever think that mental illness is fake?? I would dare such a person to willingly spend a day in a room with 5 schizophrenia patients (who suffer from all spectrums of schizophrenia disorders) and come out believing that mental illness is a myth.
Anyways, the only thing I can say about therapy and psychologists. The problem (apart from the costs and stigma) is that one may meet doctors who are in it for the money. Especially with psychiatrists who rather than help just prescribe medication. It has become a BIG business, which is why I understand that some people may make claims like "mental illness is a myth". Because our society has turned it into a myth. A "take 5 of these pills and come to therapy 2 days a week for the next 30 years). This is why people get the wrong idea. Also, MANY mental health workers are very anti-conservative and extremely liberal. Which is another problem.
One last thing about medication. If you do NOT have a severe illness there is no need to rely on pills. I am not talking about the psychoactive disorders or bipolarity etc. I am talking about people who deal with anxiety or depression. Taking pills is just MASKING the real issue. It is as if you have a big unhealing wound and you just keep putting a band-aid on it. Not only are you damaging your body by taking these pills and spending money on them. You are ignoring the real problem! Pills are a fake "cure". Unless one works their issues out in a confidential non-judgmental setting, one will NEVER get rid of mental illness. But it takes the first step of wanting to help oneself. I get sad at seeing people with depression (for example) ignore their real underlying issues and just opt for a happy pill 3 times a day. I have been there and conquered it in therapy (which I had to take as a psychology student, but helped me on a personal note).
There is a Psychologist-Rabbi who speaks more on the matter of Mental Health in Judaism.