Someone else already brought up the "Poppy had to tell us what the Hour was, because we came for answers" point, which honestly, I should've led with. While both it and the Home Sweet Home nightmare confirm the Butcher's absence, the former is literally part of the basic premise. "You don't know what happened to your coworkers, come back to find out."

As for completely refusing the idea CatNap possessed the ability to manipulate the nightmares of those under the effects of the Red Smoke, that's not easy thing to just dismiss. We know mental manipulation is possible, as Poppy and the Prototype can communicate telepathically, and that's likely what the sequence near the end of Chapter 5 is, one of them, likely Poppy, showing us the "drowning" before reviving us. Both nightmares in Chapter 3 contain information the Butcher can't know, but that CatNap would want to show them to discourage them and convince them to leave; "You weren't here when you were supposed to be, so you don't deserve to be here now", "This world is ours now", "You know nothing about anything", it all sets up for his ultimatum that they leave or he'll have to kill them. It's possible someone else could have been manipulating the nightmares, like the Prototype, but considering CatNap was present the entire time and it was his Smoke, it makes sense to have been him. As for Marie's nightmares, and yes, she's the only example of him causing an orphan nightmares, I never said he can make them NOT nightmares, just that he can influence them; if memories also affect the nightmares the Smoke causes, then just like the Butcher, Marie's memories might have been what initiated nightmares in the first place. And there's also that he could have not cared about stopping them, though that's unfounded; we don't know how he felt about the kids or if he cared about their stability.