That conceit may be carefully laid out in the libretto, but it is not carefully laid out in the production. Like OP, I was often mystified by the lyrics (at least the ones I could understand), because while some were quite on the nose storywise, others made no sense for the context or the characters.
This was particularly an issue in the already problematic Duquesne Whistle number - the erratically violent autistic man who is either murdered or allowed to die by his father gets a flashy Heaven dream song as his reward, because I guess you’re no longer autistic when you’re dead - where the lyrics refer to a love of his who is waiting for him to return. A fantasy love? Is this his fantasy of the life he might have lived? Who knows, because all we’ve been told about this guy is he’s dangerous and developmentally disabled (a cliche I would love to see Broadway stop re-visiting).
Fortunately, the sound design is muddy enough that a lot of the lyrics were unintelligible, so it didn’t entirely matter that the words made about as much sense as, well, the libretto itself.