Hrm. I might go along with the middle bit there, "Dream dragons are, at best, the manifestations of one or two, perhaps three, base instincts or desires of the True Dragon who created it". But it seems to me that that statement in no way implies either of the two around it, "no dream dragon ever exhibits any true depth of character" and "they are therefore easy to understand"--at least, from a human perspective.
I mean, tell me what the base instincts of a dragonewt are; I'd expect a true dragon's base instincts are even *more* incomprehensible. Perhaps the Brown Dragon has base instincts like "acquire treasure" and "eat virgins" and "sleep". But I'd expect he's also got base instincts like "Find the end of the center", "Eat the illusion of the mountain's birth", and "Know what is forgotten, forget what is known".
A dream dragon that embodies one of those instincts may have little depth, and be easy to understand, for a dragonewt or a deep adept of the Youf. But for anyone else in Glorantha, he'll be even *more* incomprehensible than a true dragon. The true dragon, after all, has a lot of practice dealing with non-dragony things, even if he usually can't be bothered. The dream dragon, on the other hand, spends all his time living out that one instinct--and as a result, you have a giant, fire-breathing lizard rampaging through Ralios, destroying every statue that stands under a tree on a hill--and nothing else.
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