You find the sub-machine gun, strongest gun in the game. Sweet! Time to mow down some enemies! But then you think about where you found it: at the end of a bloody hallway in the hospital basement. It's pointed at the elevator, now broken open and drenched in blood. What was the SMG's previous owner shooting at?
And, furthermore, why did he or she leave it behind?
Notice how there's a wheelchair in that hallway. Some handicapped person probably had the gun and was carrying it around in the hospital when a monster attacked and overpowered them, dragging them out of the chair and making them drop the gun. ...actually, wait, that makes it worse—why would a handicapped person carry a submachine gun in the middle of a hospital, and what kind of monster would be powerful enough to resist the damage the gun inflicted?
Also, clearly the SMG didn't work out too well for its previous owner. Not a good track record for the most powerful weapon in the game.
"Monsters? They look like monsters to you?" Vincent says he was joking... but was he? Let's look at the game's point system. Racking up points eventually leads to the bad ending, in which Heather embraces Alessa and the path of darkness. Forgiving the woman in the confessional nets a huge quantity of points, symbolizing how Heather is taking on the responsibilities of St. Alessa, including forgiveness of sins. Killing monsters also earns points, and Alessa has decades of rage built up. An end-game reveal that the "monsters" Heather killed throughout the game were actually people would have been perfectly consistent with the bad ending. She's not just possessed, she's carried out by far the single greatest killing spree in history.
There's a lot to be said for perceptions in Silent Hill, and how subjective reality can be in Silent Hill 3 especially: every character can be seen differently depending on whose lens you're looking through. There's an awful lot of evidence, especially with Claudia's father, that if they aren't still human, the monsters were at some point.
Consider also that the monsters have a tendency to attack Heather in ways that center on her sexual organs. If they're actually normal humans, and enemies of the cult, they may be trying to help her by trying to forcibly abort the child she doesn't know she's carrying, but Heather distorted perception makes her impossible to talk to or reason with... which, being knowledgeable about the cult, they already know, and are willingly going to their deaths to save the world from Saint Alessa's Child. And if they are the human cultists, they may be doing what the Missionary does in killing Harry, abusing Alessa in order to force the cult god to suffer and thus have more sympathy for humanity, maybe even seeing it as a holy ritual to leave "their" mark on the newborn god. Considering the feminine and pregnancy themes, it's a good way to disturb the fear of a teenage mother being judged for being pregnant, and to twist the tendency of people to constantly want to put their hands on a pregnant belly.
Evidence against this theory consisting of this line from Douglas at the end of the Mall level: "And that monster...what the hell was that?" Since Douglas doesn't have any personal demons on the same level as Heather, it's most likely meant to strongly imply that he sees the same monsters that Heather does, and that they aren't regular people.
Artistic License - Biology: In theory, Heather's aglaophotis wouldn't have worked. Fetuses aren't in a girl's stomach, so making yourself vomit wouldn't bring a baby out.
Well, considering what happens to Claudia's body after she ingests the god, and what the god was doing to Heather's body while it was inside her, it's probably more logical to conclude that this god grows not within the womb, but the vessel's entire body, or more spiritually, in her soul. Think of it like a parasite that can literally grow out of its host once it's, well, "mature." See also how the god was forced out of Alessa in the first game.
If one notices how the camera rises in the fake ending if you take too long or try to attack Claudia, it's implied the gods has torn its way out of Heather's body.
Aglaophotis isn't an emetic, it's a general-purpose exorcism medicine. So taking it makes you expel whatever "gods" or "demons" are inside you, whichever part of the body they're in.
In the first game, Alessa was simply doused with the stuff and it was sufficient to expel the demon.
The Mirror room. Many people think it's a meaningless jump scare, inteded to make the game more frightening. I thought so too at first—it's head-tiltingly bizzarre. But it fits with the overall theme of identity. Heather is a teenager, and moreover, She's the product of three identities: Cheryl, Alessa, and Heather herself. At that age, most teens are trying to figure out who their identities are. Heather spends part of the game trying to figure out her true 'identity', and in the end, it's something she hates. Early on, in the bathroom scene after meeting Douglass, Heather says she hates mirrors. Later on she finds the Mirror room, that kills her if she doesn't escape soon enough. And later, a mirror image of herself— of Alessa,—shows up to kill her. Meaningless? I think not. Mirrors, for Heather, seem to represent inner confusion and self hatred.
If you try to shoot Claudia at the end of the game, this causes the cult's god to be born, in a non-standard game over. At first, this may seem to be just an excuse to not let the players pull an anti-climactic Take a Third Option . But then the player remembers that the cult's god is nourished and matured by hatred and other negative emotions. And attempting to kill Claudia would be the ultimate act of hatred.
While the location of the god fetus fails biology, Buddhist monks often teach their students to center their mind to the lower dantian where the navel resides to control their thoughts and emotions. Silent Hill reflects Heather's subconscious thoughts and emotions, so in a way, it would make sense for a supernatural deity to be there.