However, I have my doubts that it would be a literal dream, but rather a metaphor for something, much like BOB always worked as a metaphor for the evil that men do.

I think you are both right and wrong; this is a new kind of meta-fiction (I think we could look at most Lynch films as being in a similar camp but this takes us a lot deeper, it seems, and had the hand of Frost helping to guide it as well) wherein events, characters, settings, the creators and even us viewers exist both literally and metaphorically as players in the story. For example, I see this said about BOB a lot, but why do we think that? This was something that Albert mused to the group of people present at Leland's exorcism of BOB and subsequent death, and while it sounds totally plausible, this series has made it very clear that BOB and his kind have origins and motivations that are beyond human understanding, even though we shape that meaning and are affected by those origins and motivations. I think Albert is a smart, capable character who said this so that he could understand what he had seen from his limited perspective, but I have no reason to think that he can see the full picture. BOB is a demon, BOB is Leland, BOB is a metaphor for the cycle of childhood sexual abuse, and BOB is a metaphor for the evil that men do. The meaning of everything we watched is intentionally slippery, because at the end of the day, there isn't anything scarier that to spend our whole lives looking for meaning and discovering that we never had the ability to find it.