My fiance and I decided on Dreams as well. We're allotting about 1 hour for photos. While we are taking pictures we plan on setting up a small cocktail reception for our guests with cocktails, appetizers, and a Mariachi Band.
As for your guests dancing, I think it just depends on where at Dream you are having the reception, and what your guest list is like. I'd probably just try to designate a small dance floor so people won't feel awkward dancing.
Based on my meeting with Yarai at Dreams, the cocktail hour is included for 20 guests if you select the gold package. After the 20th person, they charge $28/person for hours d'vours. Alcohol is open bar and included.