As the child of Indian immigrants, a good number of the movies I grew up seeing were Bollywood films. The main attraction for most Indian people, in my experience, is not the story, so much as the music. While many American people remember Disney films and the music in them, the story seems to stay with them much more than the music. This could be because Bollywood film stories are really not that great, but music occupies a different space in Indian society, particularly in the use of the Hindi language. (Note: I say Hindi here, because I cannot speak for Urdu, as I am not Pakistani or familiar with Urdu cinema.)
In Western music, the diction of song lyrics (at least in modern times) is not terribly different from that which is used by people in their daily lives. Song lyrics in Western music often manipulate daily language into something more meaningful to create different effects. However, this is not the case with Hindi. The particular lexicon used by most Indian music (not just in Hindi; other Indian languages due this) have poetic and/or religious undertones. Most poetry in India is accompanied by music, and not recited independently. The vocabulary of Hindi music is very different from colloquial language, and cannot be used in such a context.
With the advent of cinema, the role of music in India has also changed Hindi as a language considerably. It has further distinguished conversational Hindi and its poetic counterpart, by showing them in very different circumstances. Musical and dance sequences include by songs that use poetic Hindi and/or Urdu. Urdu, in India, is regarded as a poetic version of Hindi that you would almost never use in daily conversation. In contrast, conversational Hindi is shown in the regular dialogue. As a result of this, many Indians deeply appreciate Urdu poetry and music as an art form, because it is not common in their daily lives otherwise. Urdu forms an important part of the Indian culture as the biggest part of its poetic history.
These facts present a few basic truths that learners of Hindi should recognize. First is that Bollywood movies contain a great deal of knowledge of both conversational and poetic Hindi. Much of the Hindi that you need to know exists in two or three Bollywood films. However, this brings us to the second fact: it is hard to appreciate Hindi without learning about the music. Part of learning a language is learning about the traditions and culture that it is a part of, which undoubtedly includes music. You should be familiar with some Urdu so that you can appreciate Bollywood cinema (at least some of them; I would advise against certain films), as a central part of the Hindi language.
The last important thing you need to know as a Hindi learner is that different genres of Indian movies in general do not use the same Hindi. It is a common trope in Indian cinema to portray ethnic neighborhoods, particular dialects, or other languages altogether. Historical fiction, such as Jodhaa Akbar, which portrays the relationship between a Muslim prince and Hindu princess during the era of the Mughals, uses a purer or regional/rustic form of Hindi that is not especially common anymore. That particular film is good for highlighting the differences between Urdu and Hindi, as they draw much of their vocabulary from different sources, Arabic/Farsi and Sanskrit, respectively. Religious films that portray Hindu mythology use an extremely Sanskrit-ized form of Hindi, which uses almost no Arabic or Farsi loanwords. On the other hand, films that center around Muslim neighborhoods will feature extensive use of Urdu as the form of conversation.
Films that I recommend for learning and pleasure include Mardaani, Jodhaa Akbar, Main Hoon Na, Lagaan, and Two States.
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