Exaggeration is not always extreme distortion of a drawing or extremely broad, violent action. It can be a gentle caricature of facial features, expressions, poses, attitudes and actions. Action traced (rotascoped) from live action film can be accurate, but stiff and mechanical. In feature animation, a character must move more broadly to look natural. The same is true of facial expressions, but the action should be more subtle than in a short cartoon (think Chuck Jones’ Roadrunner) style.
Exaggeration in a walk or an eye movement or even a head turn can give your film more appeal. Use common sense to keep it from becoming too theatrical.