The Island of Dreams (new biome/dimension!)

The wandering merchant can give you “the gem of dreams,” and if you sleep with the gem in your main hand, upon waking you will be teleported to the Island of Dreams. Upon arrival, you would spawn in the center of a gigantic island in the middle of an endless sea. The island would be procedurally generated, but it would be enormous and contain all the biomes of this dream world: surreal biomes such as a blue plain, a dangerous red desert of poisonous cacti, mountains of coal and lava, and a yellow forest of trees with glass leaves, to name just a few examples. And as for mobs, there would be some re-skinned versions, such as buffalo instead of cows or wild boar instead of pigs, but above all, unique mobs like a floating nautilus, red vultures in the deserts, a mountain strider, glass parrots, and so on. Nightmares would lurk in the caves: a new type of shadow stone (with its variants), pointed dripstone with sharp edges, hostile nightmare mobs like Shadows, Nightmare Cubes, Rotten Skeletons, etc. A special well would appear on the island; descending into it would return you to your bed in the Overworld. Progress on the Island of Dreams would be saved upon re-entering, and there could be a special crafting or trading option that allows you to save the items you obtain on the Island of Dreams and bring them to the real world, since they would normally disappear from your inventory. Perhaps a new use for an old item? This entire concept can be used in very creative ways.