It started with hypnagogic hallucinations and now i see subtle things when i'm awake during my day like shadows of orbs/bugs flying and a strong white light or even colored circles. could this be serious if my mental health has been deteriorating too?

Possibly: While I am not certain what YOU mean by serious, If you believe the hallucinations are real, that becomes a potentially serious problem, especially since your mental health is already suffering. Please discuss this with your psychiatrist, or ask for a referral to one is your are not currently being followed by one as this mix a treatable issue with good medications available to help. Good luck