The information on the letter connected all the clues, confirmed what the little girl had said, and filled in the final missing piece of the entire incident.
The nightmare master didn't listen to his grandfather's words and accidentally released the ghost behind the door, which first exchanged bodies with his sister and then killed the other family members and tourists.
In order not to let the ghost continue killing, the nightmare master chose to sacrifice himself, imprisoning the ghost in his own mind. As a result, he became comatose, enduring the ghost's torment day and night.
The medium-layer nightmare presented everything in a surreal yet absurd manner, where every person and object that appeared in each dream had its symbolism.
"I think I understand now, just that there's one more thing we need to think through."