Does name on picture ID need to match airline ticket exactly?

Technically yes.

I practice maybe not.

I have flown several times and not included my Middle name or middle initial and it has not been an issue.

I have seen people have to change thier details at the check in counter due to typos, get there really early and ask nice because they don't have to.

Lastly if you can make the correction before you get to the airport it is much much better.