Did you see the movie Matrix?
Yes.
Actually the induced night "dream world" is synonymous with the academic religious induced daytime "word world" enslavement of humans.
I believe what he is trying to say here is that the logical structure of the Matrix proved a cage to the people living in it, like Neo at the beginning of the movie. What he is trying to relate this to is the structure of our every day lives, in which religions and languages represent a large portion.
Word has no inherent value, as it was invented as a counterfeit and fictitious value to represent natural values in commerce.
I assume he assumes that they have no value without the meaning we bring to them by logical structure. By which I mean our language seems like cute squeaks and our religions would seem quaint at best if observed by an alien from another world. Thus, something like "F*** YOU!" would be taken as a sign of affection. Somewhat like when dogs bare their teeth.
Unfortunately, human values have declined to fictitious word values.
He believes that these structures of logic are all we are becoming or have become.
Unknowingly, you are living in a "Word World", as in a fictitious life in a counterfeit nation - which you could consider Matrix induced "Dream World".
Now he is outright stating the parallel he drew earlier between language, religion, and the Matrix.
Can you distinguish the academic induced "Word World" from the natural "Real World"?
He's asking if we can draw a line between our logical structure and the inherent qualities of an object. Perhaps, more specifically, being able to see a rose not just as a rose of such height and weight, but also what it means to you personally.
Beware of the change when your brain is free from induced "Word World"
enslavement - for you could find that the natural "Real World" has been destroyed.
Here he means that by applying a logical structure to everything, we may forcing everything to bow to that structure instead of the other way around, destroying any unique qualities we might have seen before in that object.
I believe he foolishly attributes to logic what apathy and a desire for control excels at.