I believe dreams are a way of your brain reviewing what is impacting you right now in a symbolic way that is usually less emotional.

For example: I had a dream where I was putting spray foam insulation into a door frame. Symbolically, the doorway means I am entering into a new stage in my life, and the insulation means I am protecting myself from my fears. I didn't have to think about my fears to have this dream, so it was less emotional.

Perhaps it does help us come up with better solutions.

I believe dreams may be from a subconscious fear or a memory from a previous life. Dreams from the previous life are again removed upon awakening whereas one may retain a dream whose origin is fear.

I have a personal "theory" on that. It's based upon logic.
Our brains are multifunctional. Some things we do consciously. ( "I have to fun that errand now".)
Some things are semi-conscious. (The process of the drive, backing out of the driveway shifting gears braking.)
Some things are subconscious. (Motivation for our responses to people and things around us)
Some are unconscious, blood circulation, digestion of food etc.)
When we sleep our brains are at rest and it reboots our systems.
My theory on that is that when it is rebooting it is seeking solutions to resolve problems.
A part of that is in rebooting things that are happening on a conscious level with things that are going on subconsciously, and our dreams are the images that are represented to us symbolically from the subconscious level. By the interpretation of the symbols, we can get to the roots and the solutions to problems that we encounter in life.

Dreams are vital to a rational, stable mind. The fact about why we dream is scientifically unknown as is the purpose of sleep. (I Googled sleep and dreams to get that response)

When we are dreaming, our brain is very active. I do not know why we dream so many different things.

I've had dreams after pondering on or talking about certain things for an extended time. It could be something affecting me positively or negatively. I believe that a dream can be useful if it helps you visualize or conceptualize ways to improve your life, or achieve certain goals. Even nightmares can stimulate positive responses.