My daughter is 7... she sometimes gets scared of things too.. typical night-time fears of the dark/noises/etc.
When she was 5 & 6 she also had that too.
It is developmental based.
My friends kids, of that same age, say the same thing.
When I was that age, I too got afraid of the dark/night time/noises etc.
And yes, kids imaginations are very vivid.... so yes, they get scared.
Also, sometimes in school, the other kids tell other kids scary things. My daughter's classmate, had a habit of telling other kids scary ghost stories that she heard from her older sister... or other kids telling each other scary things. So, then my daughter would come home "scared."
I used to sleep in my parent's room. They let me. I grew out of it.
No biggie.
If he wants to sleep in your room, just have him sleep on the floor or something, in a padded mat or something. Not in your bed.
And yes, kids can't always articulate what their dreams are... even adult can't always do that. But they know if they had a bad dream or not.
Unless his life is the same and he is not having other kinds of problems or stresses... I would just assume that it is they typical night-time fears that kids have at times.
All the best,
Susan