Parbrahman Paramatma is different from an individual's aatma in the domain of time. The universe was created by single consciousness by its reflections just like one Sun reflects into million reflections in million pots filled with water. So does One Paramatma(Supersoul) reflects/divides into infinite Aatmas(souls).
Eko ham, bahu syam - Vedas
I am one, let me be many
Brahmsutras,Tree of Jiva and Atman explained it as well
II.3.46 The Supreme Lord is not (affected by pleasure and pain) like
this (individual being) just as light (is unaffected by the shaking of
II.3.50 And (the individual soul is) only a reflection (of Paramatman
or the Supreme Lord).
All the souls were not made human beings directly. There is a Dashavatar of Lord Vishnu which illustrates the evolution of life from single celled organism to insects to reptiles to mammals to the most complex organism i.e human. Fish to Turtle to Boar to Lion to complex Man. The universe is not a dream, its Vyavahrik Satya based on the law of Karma. There are trillions of souls on this earth in the form of insects, animals etc., but only 7 billion are chosen to be born as human with intellect and given chance to self-realize, understand Dharma and go beyond senses. Vivekchudamani also discussed about the rarity of human birth.
For all beings a human birth is difficult to obtain, more so is a male body; rarer than that is Brahmin-hood; rarer still is the
attachment to the path of Vedic religion; higher than this is
erudition in the scriptures; discrimination between the Self and
not-Self, Realisation, and continuing in a state of identity with
Brahman – these come next in order. (This kind of) Mukti (Liberation)
is not to be attained except through the well-earned merits of a
hundred crore of births.
There are three things which are rare indeed and are due to the grace of God –namely, a human birth, the longing for Liberation, and
the protecting care of a perfected sage.
What greater fool is there than the man who having obtained a rare human body, and a masculine body too, neglects to achieve the real end
of this life?
Let people quote the Scriptures and sacrifice to the gods, let them perform rituals and worship the deities, but there is no Liberation
without the realisation of one’s identity with the Ātman, no, not even
in the lifetime of a hundred Brahmas put together.
Every person's horoscopes explains the weaknesses and strengths of a person's Karmas and hence every person has an individual journey and individual Moksha. Autobiography of a Yogi.
“A child is born on that day and at that hour when the celestial rays
are in mathematical harmony with his individual karma. His horoscope
is a challenging portrait, revealing his unalterable past and its
probable future results."
Just like different birds sit on a tree for a night, so are the temporary societies and families are formed for temporary time until a person self realizes or dies. But the person liberating are very rare, hence the Prakriti system continues to operate in the form of several earths and Suns and Lokas continuously and giving chances to the past bound souls to self-realize through rare human birth.
Geeta Chapter 6
Bhagavad Gita 6.37 Arjun said: What is the fate of the unsuccessful
yogi who begins the path with faith, but who does not endeavor
sufficiently, due to unsteady mind, and is unable to reach the goal of
Yog in this life?
Bhagavad Gita 6.38 Does not such a person who deviates from Yog get
deprived of both material and spiritual success, O mighty-armed
Krishna, and perish like a broken cloud with no position in either
Bhagavad Gita 6.39 O Krishna, please dispel this doubt of mine
completely, for who other than you can do so?
Bhagavad Gita 6.40 The Supreme Lord said: O Parth, One who engages on
the spiritual path does not meet with destruction either in this world
or the world to come. My dear friend, one who strives for
God-realization is never overcome by evil.
Bhagavad Gita 6.41 – 6.42 The unsuccessful yogis, upon death, go to
the abodes of the virtuous. After dwelling there for many ages, they
are again reborn in the earth plane, into a family of pious and
prosperous people. Else, if they had developed dispassion due to long
practice of Yog, they are born into a family endowed with divine
wisdom. Such a birth is very difficult to attain in this world.
Bhagavad Gita 6.43 On taking such a birth, O descendant of Kurus, they
reawaken the wisdom of their previous lives, and strive even harder
toward perfection in Yog.
Bhagavad Gita 6.44 Indeed, they feel drawn toward God, even against
their will, on the strength of their past discipline. Such seekers
naturally rise above the ritualistic principles of the scriptures.
Bhagavad Gita 6.45 With the accumulated merits of many past births,
when these yogis engage in sincere endeavor in making further
progress, they become purified from material desires and attain
perfection in this life itself.
Bhagavad Gita 6.46 A yogi is superior to the tapasvī (ascetic),
superior to the jñānī (a person of learning), and even superior to the
karmī (ritualistic performer). Therefore, O Arjun, strive to be a
Bhagavad Gita 7.3 Amongst thousands of persons,
hardly one strives for perfection; and amongst those who have achieved
perfection, hardly one knows me in truth.
Avadhut Geeta explaining the state achieved after Moksha which is called the state of Videhamukta(without body)
[1.31] When the pot is broken, the space within it is absorbed in the
infinite space and becomes undifferentiated. When the mind becomes
pure, I do not perceive any difference between the mind and the
2.35 As the Akãsa of the pot is absorbed in the Mahãkãsa when the pot is
broken, so also the ignorance bound Jîvãtman is absorbed in the
Paramãtman when ignorance is destroyed.
2.36 He who has been able to
acquire the knowledge of the Tattvas that the Jîvãtman is absorbed in
the Paramãtman, even as the Akãsa of the Pot is absorbed in the
Mahãkãsa, becomes undoubtedly free from the chain of ignorance, and
goes into the sphere of the Light of Supreme Knowledge and Wisdom.