The situation with the jews arose after the election, and a good portion of the populace either ignored it or didn't realize how bad it was.
The 'situation' with the Jews was always present - the hate was always there. Hitler and his regime gave that hidden hate expression - in genocide. Everyone knew it was going on (really, it was never possible to hide it, nor did they even try. They were proud of it), and most condoned it, others didn't care, and a very small and brave few fought against it. Most of the latter didn't live to the end of the war, but their deeds are remembered hounorably by those where were saved by these noble souls.

So, no, it wasn't some illusion. No, he didn't really speak of complete annihiliation of Jews, homosexuals, cripples, retards or Gyspies... but he made it clear he didn't take kindly to them. The smart Jews that lived in Germany, left prior to 1939, even though things got rough from 1933-35 and on. Most of the Jews who were murdered in the Holocaust weren't German citizens, but Polish ones, Dutch, Russian, and basically any other European nation that helped the Nazis in their attempt to liquidate the Jewish people, save Denmark and Norway, who saved most of their Jews, as little as there were (less than 3,000 in both nations).