I like the premise of the game and the different upgrades and dream modifiers you can have but I feel that the control of the dog and the behaviour of the sheep actively go against the rest of the game.
Sending the dog to a location by clicking would be nicer I think and let you just keep using the mouse over the entire game. Buffs and nerfs to speed or response could still be overlaid on top.
More importantly if the sheep had some form of herding behaviour, it would make the experience a lot more satisfying I think. If you wanted the game to be harder you can always increase other things like the ramp of targets needed or introducing more adverse effects, but overall it might be good to make it less about fighting the “spread in all directions” behaviour of sheep and more about choosing your upgrades wisely and what groups to prioritize herding.
For example regular herding would make the sheep form into groups and bark could break those groups up, this way you could herd out groups more effectively while still be able to select what to send first.
The space modifier for the dog feels overly sensitive I think.
Overall, it’s a fun idea that I’d like to see developed further, also groovy music!