There was something awhile back in Family Fun magazine. Use graham crackers for the bed, a vanilla wafer for the person's head. Have the kids decorate the "dreaming person" - the face, the blanket, etc. You could do colored frosting, sprinkles, all kinds of fun cake decorating items. Kids love to frost and decorate things. You could incorporate dreaming easily into this...
I did this years ago for a sleepover party and put the graham crackers on top of a cake, being the bed.
Moderator adds: here are instructions for making a sleeping bag snack (same idea as above) found at https://hungryhappenings.com/sleeping-bag-snacks/ . To the right is a photo showing one we made at a sleepover. I was thinking that for Joseph's dreams you could decorate the sleeping bag (blanket) where we had butterfly sprinkles, the kids could pick one of the dreams and decorate the blanket with that dream scene. Would require you to see if you could find sprinkles to match dreams (examples: stars, sun, moon sprinkles; other idea would be to have those small tubes of icing on hand, in colours like Yellow (corn), white and black (cows), etc. where they would draw the scene with the icing tubes.