Look up the Titanoboa, than consider the myths of the Midgard Serpent or Loc Ness Monster. Look up the Draco Volans and compare it to the European dragon drawings. How much serpent imagery do you see in Celtic art? Did you know snakes don't exist in that region? So obviously people got around! It doesn't mean what they saw was plentiful or common.
Birds and reptiles came from dinosaurs and the dinosaurs exhibit characteristics from one and sometimes both forms of creature. Did giant "dragons" exist physically? Sure! We call them dinosaurs. Are there still some out there? We have a very very big ocean with much of it unexplored. We also have many areas of jungle that scientists are just beginning to unravel. The possibility that such "beasts" continue to exist in a form similar to what they once were has potential. Do they breathe fire? I'm going to say no. They are most probably smaller now however, at least I hope so. And if they burn you with anything, it would be like the Komodo Dragon that spits acid.
As with any animal, they have a spirit. That spirit lives on even when the body has stopped. Working with animal spirits myself, I can tell you that they are far more intelligent than one would expect. So people claiming that "dragons" in the spiritual are super intelligent doesn't surprise me. I don't believe they are more so than other creatures and beings. The ancients never looked down upon animals like they do now. In fact, if a person killed a cat in Egypt, they were sentenced to death themselves! Human society makes animals insignificant when they are far from it.