Learn Spanish (Latin America): ¡La leyenda dice que el héroe es un genio! - The legend says that the hero is a genie!

Yes! In Spanish, genio can refer to a "genius" (a highly intelligent person) or a "genie" (a magical being). You have to rely on context to know which one is meant here.

Since the sentence uses dice que (says that), shouldn't the next verb be in the subjunctive (sea instead of es)?

Not in this case. When decir (to say/tell) is used to report a fact or share information, it is followed by the normal indicative mood (es). It only triggers the subjunctive when it is used to give an order or command (for example, if the legend told the hero to be something).

Why does héroe have an accent mark?

The word héroe is split into three syllables: hé-ro-e. In Spanish, any word where the spoken stress falls on the third-to-last syllable must always have a written accent mark to show that pronunciation.

Why do we need the article un before genio? I thought we dropped it after es.

You do usually drop the indefinite article (un/una) for professions, religions, or nationalities (like él es médico). However, a genie is considered a specific type of entity or mythical creature rather than a human profession, so we keep the un.