Wow, so much speculation !

While it's true that the sequences definitely have some importance in the story, I didn't think that deeply about them while playing.
Is it only people that are dead ? I thought I heard some lines from some squadmates who aren't (at least in my game), like Wrex or Grunt. Don't know if someone else mentionned it, another case of tl;dr from me. Sorry ;P Maybe just bad memory on my part. The shadows do whisper things, though I couldn't recall exactly what. I don't remember noticing they said anything leading me to think the child was "evil".
Note: I'm not making up another theory down here, just saying how these dream sequences made me feel, and the guesses I made about how the story would unfold while on my first playthrough.
The way I interpreted the dreams, is that Shepard (I'll use the male version) is having recurring nightmares as his mind/subconscious is "breaking down", not from indoctrination, but from sheer fatigue and pressure brought by the current fight, being pushed as the "one hope" for all life, etc., re-hearing dialogue lines, both good (pushing Shepard forward almost relunctantly) and bad (being criticized for various actions). For all his strength of character and power in battle, down below he's only human, and he doubts.
The child (the same that died in the beginning) represents what's left alive of humanity, and the fear of arriving too late to save them, as shown by the fact that you keep running after him and he's somehow always out of your reach until the end, when the Reaper "appears" and engulfs him in flames. For me, it showed the fear of losing everything that's at stake. And also, the fear that this time, the fight might very well take his own life (for real this time). Doesn't one of the sequences show a "double" of himself with the child as he burns ? It sort of made sense for me back then.
While playing, this supposed display of breakdown/depression made me think it wouldn't end well for the commander, i.e. he would probably die as a last heroic act that would save the rest of the galaxy. I had heard about ME3 being the last story with Shepard in it (while not necessarily the last in the ME universe), so it made sense that he would die in the end, at least in one of the endings.
Another thing that I found to back this "depression" idea while playing, was the atmosphere after KL steals the VI on Thessia from under their noses. Shepard especially is depressed at losing this fight. I think it was one of the rare times we see him showing real disappointment to his superiors, instead of the usual "we'll get it back ! they'll pay for this !". I actually thought it was a very strange reaction, since we've basically been *winning* against Cerberus the entire time before that mission, saying "HA! We beat Cerberus to the punch again, oooh, TIM must really be choking in anger right now !". And now, first actual "loss" against Cerberus, and everyone's down in the gutter ? This contrast felt kind of unnatural.
Anyway, just thought I'd give my impressions on this. Maybe some have had totally different impressions while playing