I think that the tributes are given the stylists so that the Capital can make a mockery of the Districts. Seriously, how many times can you dress someone up as a cow? Though I did like what Cinna designed for Katniss and Peeta.
I think that he meant it but Haymitch used the story to try to gain the upper hand. I think Haymitch used the story to get ahead in the games...if that's even possible. I think what Haymitch means when he says what he says, is that to the people of the Captial, The Hunger Games are just that a Game. One that if it isn't exciting the Gamekeepers make exciting so that the people of the Capital stay involved. The tributes need to impress the sponsors so that the sponsors will send the tribute(s) what he/she/they need once they are inside the Games.