Why is this entire world as unreal as a dream?

In a Zoom meeting with the Ramana Maharshi Foundation UK on 26th August 2023, Michael answers various questions about Bhagavan’s teachings. The first question Michael answered was: "My question is related to the apparent reality of the world, as experienced in our waking state; Bhagavan's teachings say that our so-called reality in fact is a dream, projected by ourselves. From an intellectual level I can relate to this when I look at the world and its inhabitants as being a collective of apparent individual entities, whereas in fact it's the one (Brahman) playing out the script we call life and erroneously take to be something 'happening' to us as an individual. Also, I think to understand the role the ego plays in this through our identification with the body, mistakingly making us believe to be ‘one amongst many’. In all multiplicity that appears to be, where I seem to get stuck in my understanding, is: a. how literally we should take life to be a dream? b. and what can be called real in the apparent dream-like individual life? 1. Is it that (the sense of) individuality by definition is dualistic and therefore unreal, thus: a dream? For instance my neighbour will have a slightly different viewing point in looking at the world since his locality is slightly different. When my neighbour is merely a dream character projected by me, he actually doesn't exist at all, along with all wars, disease, the seasons, bodies, plants, volcanic eruptions, planets, entities etc etc. Can we conclude that these do actually not exist, hence, making all interpersonal dynamics in our lives unreal as well? 2. Or should we take the dreamlike waking state in a more metaphorical sense, so that the multiplicity of bodies seemingly exists because of the identification with our bodies and therefore mistakingly experienced as ’individuals’, forming a multiplicity of realities, limited in their nature, therefore arbitrary and impossible to be taken for ‘real’? 3. Or is it to be taken as a dream due to the impermanent nature of the world we see as defined in Advaita Vedanta as “Things that are changing, perceived and impermanent are unreal”? 4. Or a dream because of the fact that we can practically make up any narrative or world-view we like, creating the world as a projection made up by our (ever restlessly outgoing) mind? 5. Or a dream in the sense that all is predestined and we erroneously believe ourselves to be the doer or actor in the projected life we live? This, I find rather confusing to comprehend and sometimes difficult to deal with. This episode can also be watched as a video here and a more compressed audio copy in Opus format (which can be listened to in the VLC media player and some other apps) can be downloaded from here.