A very cool explanation @flaminghedge with the right-left brain example and the picture of the cat!
I have always been fascinated by 2 facts
We can always surprise ourselves while we dream, because one part of our brain creates the dream and the other part completely unaware of it can live the dream and be surprised at it! We are both creator of the dream/memory and consumer at the same time or almost instantaneously
From the movie "memento", some memories are purposely created for us to relive it as pleasant later on, albeit quite different from the actual reality. Like the protagonist writing the letter O and a 0, so that it can be misread carefully. Escaping from the harsh reality of truth are we?
Its always a different experience when we "live the experience" and when we look back to it . we unknowingly pick items from the same experience to justify our conclusion. Like remembering a past painful experience as being bullied as "fun", when we grow up. its the same experience , but recollected in a different manner at different time.
In short, given enough time, anything can be proven right or wrong? maybe!
Haha! Your number 1 is actually something I want to write about soon! Not necessarily limited to dreaming as the context though, but about how the conscious confabulates from the subconscious.
I might delve more into self-justification too. There's definitely other angles and implications beyond rewriting our memories.