Game Design: brainstorming

Things I'm trying to figure out:

• How exactly are the little nightmares form? Do they spawn every single time a person has a nightmare or are there any other requirements?
• Are little nightmares visible to humans? If so, how do humans react to them? If not, who can see them?
• What is the game about? The day-to-day of being a little nightmare? The way other creatures (humans, animals) interact with them? Something else?
• What type of game will this be? A journaling one or a more traditional one? Which system will it use?