Here is a summery of the occult worldview about thoughts, emotions and dreams. It is not favoured by Science, as yet, but it bears a compelling logic:

1. Thoughts are vibrations created on the mental plane. Thoughts originate in the mental body of a human (which is one of the seven bodies or vehicles of human consciousness). Human mind comprises four parts: manas (sensory, processing mind), chitta (storage of impressions), ahamkara (ego, the I-maker) and buddhi (that part which knows, decides, judges and discriminates).

2. The sensory, processing mind (manas) usually resides in the physical brain. The storage of impressions (chitta), which is the equivalent of a hard disk of a computer system, resides in the mental body. (It is said that all the impressions are stored in the form of Akashic records on the higher mental plane.) The discreminating part (buddhi) resides in the causal body, and works on the higher mental plane. The ego (ahamkara), when it relates to the body and the manas, functions in the astral and lower mental planes, while the higher form of ego, the Self, functions in the higher mental, and makes the real man. The term man itself originated from manas, meaning
that man is a Thinker.

3. If thoughts are of an abstract nature, for example, the idea of a triangle, they create vibrations in the higher mental plane where all the archetypes of human thoughts reside. This is the area from where the poet is favoured by the Muse, the artist gets his inspiration, and the scientist a sudden revelation of a solution to a problem. The abstract thoughts percolate down to the physical brain via the lower mental, astral and physical planes, creating shapes of matter gathered in each plane. The shape is concrete, for example, an equilateral triangle, on the lower mental plane.

4. If thoughts are of an emotional nature, benevolent or malevolent, they immediately descend to the astral planes, creating thought forms that get charged with immense power to move and strike the target, if there is any, or just hover like a cloud, if they are general emotions like anger. Love and devotions are two emotions that have the highest rates of vibration and connect to our higher bodies and the higher planes.

5. Imaginations are concreate shapes given to an abstract idea. For example, a ghost is a shape in imagination, from the abstract idea of an evil or dark force or energy. Imaginations arise out of past experience, whose impressions are stored in (the chitta part of) our mind.

6. Dreams are of two types. When we 'sleep over' a problem and get the solution in a dream or in sleep, this kind of revelation comes from the mental plane, not necessarily because of the thinker himself, but may be due to help from another being. We need to remember that the 'stream of consciousness' created by vague and idle thoughts are always pulsating around us. Our etheric brain absorbs some of them when we sleep, and dramatizes them into a world of its own. This accounts for the illogical, incoherent and often ghastly dreams that we have, which have nothing to do with either the surroundings of our life or with our own personal nature.

7. The second type of dream is the actual life the astral body leads on the astral plane, during sleep of the physical body. When we sleep our consciousness gets focussed on this plane, releasing our astral body for action and its related experiences. Such experiences are hard to translate to the language of the physical world, which is why, we are unable to recollect our dreams clearly.

The ideas presented here are the worldview of Theosophy (which is essentially based on Hinduism) and man's ancient traditions.