How Realistic Can the Fictional Dream Be?

A few nights ago, I dreamt I remembered flying a small plane with my cat in the copilot's seat.  Notice that I didn't dream I was flying with her, but instead I was remembering that I had.  I recalled her sitting up in the left seat, peering out the windshield, calm and happy, queen of all she surveyed.  And she was surveying quite a bit, being a mile or so up in the air.

Of course this never happened, and if somehow I had lost my mind and placed her in that seat, she would not have stayed put, she would not have been calm or happy, and she couldn't have seen over the dashboard either.  I wonder if instead I had dreamt that we were flying together (rather than remembering), that upon waking I would have known it was a dream.  As it was, it took a moment for me to realize (later in the day, when the memory came to the front of my mind) that it was a dream and not reality.

As writers, we strive to create fictional dreams.  Our stories should pull a reader into the book, into our protagonist's world.  There have been a great many great writers, and I have read a great many of their works.  I get engrossed in my reading:  I laugh out loud, I nod my head, I cringe, I duck, I squirm, I jump, I cry....

Why have I never mistakenly thought, even for a moment, that a passage I've merely read actually happened to me?

Has it ever happened to you?