Question 1: True
The speaker acknowledges that the other person's belief about their life being a dream is not incorrect.
Question 2: True
In the first stanza, the speaker implies that what we perceive may not be real by stating, "All that we see or seem / Is but a dream within a dream."
Question 3: the grains of sand
The speaker expresses a sense of loss and helplessness as the grains of sand slip through their fingers, indicating they are unable to keep them.