The lyrics of the song indicate that the object of affection has either (1) not yet been attained in person OR (2) has been attained but for one reason or another (geographic separation, breakup, sudden life change, or death), the singer and the person he/she loves cannot be together.
If the former, then the singer is wishing for the relationship he/she desires with all his/her heart, but it hasn't happened yet. He/She is hopeful, perhaps, but time is slipping away and all he/she has to show for it are the dreams. Hope mingled with what may be a bleak future.
If the latter, then despite the distance between the singer and his/her love, the singer can always bring up the memory, the treasure, the beauty of their love whenever he/she dreams. That's a message of hope: time and distance cannot take away our dreams and our memories that we treasure. We may be dreaming our lives away, but what's the down side to that? Not having those memories? Maybe dreaming isn't such a bad alternative. :-)
Personally, I think the song may originally have #1 as its meaning, but I definitely prefer #2. I'm a true Romantic (in the fullest sense of the term--not in the hearts and flowers sense alone), and I see nothing wrong with tempering the present with the hopes of the future and the treasures of the past that we have stored up internally. Although the object of our love may not have a physical presence, that does not mean we withdraw or diminish that love. Not a bad place to live, eh?
