All arts are a form of story telling, and all story tellings are a form of art.
What makes a story? Or better yet, what makes a good story? There're a lot of good answers for that, which means there isn't a one-liner fits all answer.
There is, though, a common ground for all the answers: stories are about all the different and complex ways we communicate, with ourself and each other.
The ancient paintings were epic. They were big, full of gods and battles. It easy for us to look at those and think that this is what people liked at the time, but the truth is that this is the only thing the knew. When Van Gough presented a photo of a simple room or a pair of shoes, it is not is paintings techniques (though very good) that was exclaimed, it was the message and the novelty: a pair of shoes also exist, and therefore can be an object of a painting - they deserve a story.
There are infinite amount of ways to tell a good story, but there is only one way to distinguish one: a good story will always stick.
This is just my opinion, and I know it's an unpopular one.
I believe any kind of conscious dream processing is unhealthy. Our dreams is already the results of some kind of processing, so feeding them back as more experiences that need to be analyzed is confusing and tiring for your brain.
You said that you've been doing it since your school days, so perhaps you don't remember, but dreams are made from a different material then regular memories: they are usually very "slippery" and hard to hold on to. I think it's important in this case to go with our default behavior and to forget them as fast as possible. And yes, it means that all lucid dreaming practices are damaging your brain functionality IMO.
To break the loop you're in, I think you need to re-learn how to not mess with dreams. Give yourself the time you need, and if you're tired the best thing to do is to go back to sleep. But avoid doing so while thinking about any dream, or anything that is related to a dream, or even the abstract concept of dreams. When you catch yourself doing do, dismiss the thought with "oh, that isn't important" and then switch the topic to anything else, anything at all. You can follow the line where the wall meets the ceiling, for all your brain cares. The dismiss part is important, don't skip it. It prevents your brain from re-saving the thought. This trick can also be applied to that embarrassing moment your brain keeps popping at random times. Just "not important" wave, and a quick change of subject. Works like a charm.
Is this based on anything other than a feeling? You've equated remembering or reflecting with processing and processing with dysfunction, which makes no sense at all because memories are a core function.
Remembering and reflecting is processing, your brain doesn't have a read only mode.
My claim is that processing a by-product of processing is confusing. It's blurring the line between what's real and what isn't, and to me this is a dysfunction.
What makes a story? Or better yet, what makes a good story? There're a lot of good answers for that, which means there isn't a one-liner fits all answer.
There is, though, a common ground for all the answers: stories are about all the different and complex ways we communicate, with ourself and each other. The ancient paintings were epic. They were big, full of gods and battles. It easy for us to look at those and think that this is what people liked at the time, but the truth is that this is the only thing the knew. When Van Gough presented a photo of a simple room or a pair of shoes, it is not is paintings techniques (though very good) that was exclaimed, it was the message and the novelty: a pair of shoes also exist, and therefore can be an object of a painting - they deserve a story.
There are infinite amount of ways to tell a good story, but there is only one way to distinguish one: a good story will always stick.