From personal experience, I have some proof that dreams are not similar to plain eyesight, and are probably produced somewhere else in my brain.

In a dream, I saw a friend. The images in the dream were very vivid, and I could have easily mistaken the dream for reality. However, when I woke up, I could not tell whether I had seen my friend from the front, or from the back.

This suggests that the property "feels very realistic" can be produced separately from a dream actually being realistic. I highly doubt that dreams are indeed producing high quality visuals.

I have also tried to draw faces from people that I have seen in my dreams. I am fairly proficient at hyperrealistic portraits, but with the dream recall -- no luck so far.