You are right about the first one. That is why I called it normal. Because it is really just applying this to the normal technique but instead of visualizing, you actually see it with your real eyes and then your dream eyes. It helps those who may not be good at visualizing.
For the second one, I think you misunderstood what I meant by dream. In the beginning of the night the scene you would make would in fact not be the dream. But (and this is assuming that you are good enough) it is a closed eye hallucination that you control. I say dream because (again only if you are good enough at all the senses not just visual) if you do it right, it should feel as if you are in a lucid dream, only difference is you consciously made it. I do know from personal practice that the once the rem cycle hits, the incoming dream seems to build of of what you made instead of going dark. You can definitely tell because it takes a lot less concentration to keep the hallucination going.