Rhetoric can refer to exaggerated or inflated talk, much like that which we hear in political speeches. That is because rhetoric refers to the art of persuasion through carefully crafted words. Rhetoric can be used as a pejorative term because it suggests that the speaker (or writer) is using words falsely, instead of using "plain talk" to convey something.
On the other hand, crafted words don't have to be false words. You can say something you really do mean in an artful way. In literature specifically, that can be a good thing!
In literature, rhetoric is what convinces you to feel a certain way about a topic. It is the art of conveying a point in a convincing, eloquent, and effective way. Rhetoric is what makes some writing beautiful and other writing bland.
The study of rhetoric goes back to ancient Greece, when speakers began to practice the art of persuasion in courts of law. The ancients realized that presentation is as important, or perhaps more important, as facts.