Exercise: Does it correlate to one's own mental state?

Okay, to kind of get straight to the point: I'm looking to become fitter and healthier, but in a lot more ways than just physical. Last time I weighed myself (it's been a while since I'm not on very friendly terms with scales) I weighed 255 lbs. I track what I eat, what I drink, and what exercise I do. However, exercise is a big problem of mine. I was never fond of exercising when I was younger, (I was lazy and sedentary), and always saw exercise as a choir rather than something that should be fun or part of a routine on a daily basis. When I entered into college, exercise became more of a natural habit, since I didn't have a car or license and taking the bus back and forth to school was the only choice. Not to mention my classes were so far apart (one being in the back of the parking structures up a steep hill, practically off campus grounds) that walking didn't seem like exercise, but more of "How else am I supposed to get to class?" and didn't think much more of it. Not to mention I didn't have much money to spend freely as a college student, so snacking and eating out wasn't part of the routine, and even if I did eat, I was exercising so much and eating so little that it did, in a way, balance out. I lost a lot of weight as a college student.

Unfortunately, many factors came into play that quickly stopped this: I got my license and car, so taking the bus was no longer necessary and so was walking home; finances became tighter so I eventually stopped going to school; I started working in Target retail stores where fast food chains and junk food became readily available, as well as the money to spend; and I quickly became lazy at home instead of active, using the "job" card frequently to not do much. (I sound like a horrible person in this, don't I? But I'm being honest). I became very serious in a relationship where my boyfriend and I live together, and I stopped worrying about how I look to him, and eventually we started spending almost 24/7 together, the only time not around each other is when we are at work.

I am highly insecure, I lack confidence and am emotionally vulnerable. Although I hate quoting my mother or even telling her that she's right, (I'm stubborn, hard-headed, and like to be right no matter what), she keeps informing me that getting more exercise in my day will make me an emotionally and psychologically stronger person, not just physical. She tells me that staying home all the time and being around my boyfriend can be poisonous to my health, and that I need to get out more and get more exercise into my day. She tells me I'll feel good about it, that there will be more endorphin flowing through me to make me happier, and tells me that as I exercise more, I will develop more confidence, I'll fight off the depression a lot easier, and things will get better with me on the inside and out, as well as make the relationship with my boyfriend stronger.

I hate telling my mom that she's right but I am listening to her and taking into account what she says. I think (scratch that -- know) she's right, but I also want to know from the community. These are the questions I want to ask, and see if there are success stories or people who were in the same boat as me that changed. These the questions:

1) Does exercise really change and/or effect a person's overall mood and state of mind?

2) Can a change in exercise habits (or lack thereof) change a person's mood and emotional state, make them more confident and secure in themselves?

3) If willing to share, does anyone have a story to tell of how exercise made them better? Not just physical, but did exercise better your life on the outside and in?

4) I am looking for happiness and acceptance with myself. My mother suggests seeing a therapist, but I told her I want to try healthier alternatives, (change of diet, increase of exercise, and lose weight), before that. Do you think this is a wise/understandable choice? Do you agree with my mother? (I will never tell her she is right because I am stubborn. I know she is though. I would like some feedback from the community.)