One of the possibilities I had in my mind for a possible timeline (one of 4 I came up, there's just not enough craziness in the world) involved that the spin-off games were fake memories from Klonoa. It's a mess, but yeah, I think the Klonoa games are dreams.
Probably one of the games doesn't happen inside a dream, but I'm not sure if only one happens in the real world or every game happens inside dreams, no exception.