As someone with damage to the hypothamalus and extreme insomnia, I have a certain enzyme in my head that turned on at puberty, but never shut off because of disagreement with seven dudes and a baseball bat when I was 18. The enzyme in question is basically what finishes "cooking" your brain. If it never turns on, it sometimes results in eidetic memory. Far more often it results in schizophrenia.
Think of it as a woodsman who clears away the underbrush so the mighty sequoias that form the basis of your personality can grow.
For me, it never shut off. It has been constantly deleting explicit memories, at random, for years. I have forgotten my entire childhood. I have no memories of my mother. I forget people fairly quickly. However, the implict memory center works just fine. What is the difference? Explicit memories are REAL. They are things you actually experienced. Implicit memories are the part of your memories that are constructed. Tell a lie, it's an implicit memory. You hear a lie, you remember it as an implicit memory. TV shows that are fiction will be stored as Implicit memories, but real world news is not.
How does your brain know this? Damned if I know, but since I have experienced the loss of memory in real time. I can actually TELL where the missing files are in relation to other memories with gaps in them. (I remember the room my mother died in with amazing detail, but cannot remember what she said or looked like.)
So what does this have to do with dreams?
Well, another side effect of all this is insomnia.
Apparently, Explicit memories don't just exist in your head. They require processing. Explicit memories are the part of your mind that houses your personality. Your feelings, emotions, reactions, etc etc etc. Now, you CAN store feelings and emotions in the implicit memory part of your brain, but that is what we call "Flashbacks" or "PTSD".
For example, The Christmas Spirit.
You know that fuzzy feeling you get around the time of Christmas? That's a form of PTSD, just a positive one. We don't think of it that way, but mechanically, it is.
(I'm getting to your question. This just takes some set up to explain.)
Now, the human mind builds up explicit memories, but there is only so much room. It needs to be processed. Think of it as Data compression. Your memory is not perfect. Everything DOESN'T get stored in there forever. You do have shit deleted. If you don't, your brain will break down. Like defragging your hard drive on your computer, it's not something you want to do while you are running other important programs.
In effect, your dreams are when your brain starts to defrag itself.
As it does this, it has a hard time understanding the difference between a "Real" memory and a "Remembered" memory. When something happens over and over, your brain picks out patterns and chooses to take those patterns and move them to long-term storage as Implicit memories. You run into this problem where it takes the concept of "Light Bulb" and then it will have subsets of "Light Bulb" with "Burned out", "LCD" and "Florescent" It helps on space, but results in you glazing over details your brain doesn't think is important.
When you dream and enter REM your brain is trying to find patterns, process the built-up detrius in your mind, and optimize your performance. If you haven't been dealing with important events in your life, it can get confused and focus on certain things. Your brain then looks for patterns and starts flailing about and connecting it to other things in your implicit memories.
BTW, LANGUAGE is an implicit memory. Every word you see as you read this is an implicit memory subroutine setup. Stop thinking as your brain as you. Think of your brain as a massive computer, and you are the "pilot" in your brain. The YOU that is YOU is about eight ounces of Protein and lipids stuck on the front called the frontal lobe. You set up a lot of subroutines that you choose to trigger or halt.
When you are dreaming, your brain is trying to process data, but sometimes the frontal lobe activates because you have a hard time telling what is "real" and what is a replayed memory. A "Dream" as we call it. So as you filter through the data, it seems real to you and can be rather traumatic.
How do I know all this?
Because most of my explicit memories are GONE.
I don't dream much anymore. Usually it's rather dull things. Emotionally, everything that formed the "pallet of emotions" is gone. I am capable of emotions, I just don't have any "context". I used to be afraid of heights. Now, I really don't care.
However... I once tried to cure myself of my fear of heights by watching the movie Cliffhanger repeatedly. It did not works. But funny enough, because movies are fiction, the fiction is stored in my implicit memories, and I am still afraid of the movie cliffhanger.
So, I am no longer afraid of heights, because I forget the "Real" memory that made me afraid of heights, but I remember being afraid to watch the movie cliffhanger, so it still terrifies me. Why? because they are stored differently.
Dreams are usually when you try to process your explicit memories and find patterns in those memories. Your brain is trying to sort out what to keep, what to add to other implicit memories, and what to keep AS an explicit memory all by itself.
Your dream doesn't "Mean" anything, except so much as when you were trying to sort whatever recent explicit memories you had, it searched for patterns and those were the implicit memories that were closest to matching what you were processing at the time. There is no deeper meaning than that.
Freud was a FRAUD.
As you get older, usually past age 25, you will find all this start to settle down, unless there is something you are dwelling on. When you store emotions in implicit memories with flashbacks and PTSD, that's where things start to get screwed up. The solution is to get professional help. No. Seriously. Its very difficult to edit your own brain if things get bad.
However, this doesn't sound like that. This sounds like normal shit. The key is not to mystify it. Don't add significance to something that doesn't matter. You are the pilot of your own mind. There is no Subconscious. There is only the programming you installed in your own brain. If you don't like your habits or patterns, you can reprogram yourself. There is no secret hidden person inside your brain. No Id, Ego, Superego. There is just you and the subroutines you programmed into your own mind.
Once you realize there isn't anything magical or special about your mind, management becomes rather easy.
