Miko: annotations

“Wretchedness” is variously explained as incompetence, weakness, or social inferiority. In any case, Hippolyta means that she does not like to see someone whom she feels sorry for being overburdened.

Theseus is saying to judge the performance based on the performer's ability. Today we might say to give someone an “A for effort”.

scholars, or possibly church officials

are made up entirely of imagination

Bizarre. The First Quarto spells this word “antique”, which some modern editions follow. In that case the meaning could be that these are old-fashioned tales.

Master of the Revels

Even more joy to you in your walks, meals, and bed.

Many modern editions end this sentence with an exclamation point, but both the First Quarto and First Folio end it with a question mark.

At night when you're afraid, it's easy to see a bush but think it's a bear.

Theseus is saying that if the mind finds some joy in something fanciful, then the mind will find a reason (“comprehends some bringer”) to believe it.