Yeah I don't get this either. Why put fiction within fiction? I get that from MC's POV, having sex and dreaming about it are completely different things, but to the player... it's the same exact thing.
More broadly, I've seen the same problem within many harem stories like this - many LIs are already very attracted to MC by default. Or they become sexually attracted after seeing MC's penis for some contrived reason. In this case, it's literally just that for all the currently developed LIs. That or a horny dream. Really makes for a poor copypasted story where they all tell each other how amazing they are over and over.
As for the sandbox, this game has no reason not to be a VN. The gameplay is not fun, it's not tied to the story in any way, it's not using the medium for some artistic reason, and I'm willing to bet the dev wouldn't grind in his own game either. Not when you need literally tens of thousands of clicks that all do the same thing with the same result to get all the skills. Not accounting for love/friendship/whatever deterioration.