Don’t exaggerate -- show where and how they can improve. Don’t put the candidate on a pedestal. Not only does it not look plausible, it will also set expectations for them that will be next to impossible to meet. If they have an Achille’s heel, don’t exaggerate it, but don’t hide it, either.
Some applications, such as professional schools give applicants the choice to waive their right to view their letters or not. Usually, applicants are encouraged to waive their rights because if they do not, it is a sign they are not confident in their recommenders.