I will answer your questions about the meaning of life.

[bisonbison]

Why do dreams include actual people from my life, yet I have no control over who it is and what happens in the dream nor where it takes place?

Dreams are grist for the mill.

The mind needs work, and dreams are the mind working at a level above the threshold of perception and sometimes memory.

The mind drafts the recent topics of it's day, and pulls a few random coincidences out of the crowd and puts on a show. A show that inevitably ends in you eating your own armpit of deep, stupid insight.

By the way, the proper term for a dream or brilliant idea that's slipped your mind is cock-[censored].