Interesting. I often have vivid dreams, and frequently ones that sound terrifying in description, but so far, they have mostly not terrified me, especially while I was in them. The ones that have actually bothered me are thankfully few and far between. I have also never experienced smell in my dreams. I think it is more reasonable to consider dreams a way that our minds process memories and feelings, than deep signifiers of inner, unknown, turmoil full of portents which must be interpreted with books and websites which link various apparent symbols with meanings which do not often readily follow from what the symbols actually are. Is there a trauma in your recent past you may be grappling with? Or are you undergoing one of the major life stressors (move, new job, unemployment, new relationship, death in family, etc)?
There's a great Radiolab on sleep from years and years ago where they put forth all the scientific evidence that, evolutionarily, dreams are our brain's "fire drills" wherein it runs all our synaptic paths through the patterns that release the most hormones. In other words, things that freak us out are the things that it's going to hammer on during sleep. They further made the observation that the function of sleep, neurochemically, is to wash away the less successful decision trees so that the more prominent ones function more efficiently. In other words, yes - when you're tired and can no longer learn something, sleeping on it will allow your brain to accomplish the task with better utility. It's kind of like brushing away the chips before you continue engraving. It's effective, too. That dream where your teeth fall out before a job interview? Actually lost a tooth before a job interview and wasn't even stressed. That one where you wake up late and only have 10 minutes left to do the final? Fuckin' 88% bitchez. To be fair, however, both events happened in pants.
I think the most major thing I'm grappling with is really what comes next for me. I graduated from college a few months ago, and while I have been actively pursuing a new job (my current job was a part-time gig I worked through college to keep money in the bank) I haven't really been able to find where I fit in the workforce yet. It concerns me, but I never thought that I let it get too heavy on my shoulders.