My own version of "The Truth" on this one is a definitive "Yes, and No".
If you're the DM you can create any monster or creature you like, with or without Polymorph spells.
If you're a player, your character can Polymorph into anything the DM will allow in their game.
I've had people want to turn into "Winged Folk" (an early edition of Avariel Elf), in a game world where they didn't exist. The race had been documented in a Dragon article, and is currently in the Faerun source books. But my game wasn't set in Faerun or whatever world that Dragon proposed for such a race, so I said no. DM's prerogative.
Whatever you want to Polymorph into has to be approved by the DM. You can generally presume that anything found in that DM's game world is fair game, but even that can be vetoed. If you want some new race/creature, or something from a different setting you need to work it out with the DM to determine what's allowable and what isn't.
By the RAW there is no actual limit, beyond hit dice and restrictions like Outsider.