I've also read about that with sleeping on back. Even I get to experience it with sleep paralysis at first but as time went on I still get it with whatever position so I stopped caring haha. Yeah it's psychological for me, but as for the physical effects a good mattress definitely lessened my backaches and saw a difference when I upgraded to a spring one instead of just foam.
I also agree, whatever works on you lol. Happy your nightmares stopped because they suck big time!
Hahah yeah playing Zelda on your bed til you fall asleep, like you mentioned in another comment XD