Such an interesting topic! And a intersting theory too!
I never used my sense of smeel in dreams and I almost thought it was impossible. Thanks to you I know it isn’t, so I’ll try to get it.
About your theory, Susan_Y, I kind of experiented myself though I’m not sure it was in a “dream”…
Several time, I selpt only a few hours during night and so I took naps (I normally never do it). And just before these naps, I had like a “pre-dream period” with very realistic hallucinations. I wasn’t sleeping, my mind was awake, but well, my eyes were closed and I was seeing and feelings unreal things.
During this period, I regularly slept with someone other in my bed. And so the hallucinations I got during the nap I took the same day was almost always the same: this person was here with me, I could see it, hear it, touch it (though I wasn’t moving at all, it was the hallucination which was coming to my body, and I could feel when it touched me) and… smell it.
So that wasn’t actually a dream… but it kind work with your theory
I will try to focuse during my next sex dreams