After a bizarre conversation with the queen's sister, it seems it's time to get introspective.
You need to navigate your soul to find 'dream shards'; the things that torment Geron are represented by various items in this dream world.
Pick up everything you can find - remember that you can hold the spacebar to see interactable objects.
You'll need a key, but it's only accessible through a strange portal.
Inside of the clothes chest, near the bed - you'll need to take the flute out of the chest first.
There's a huge raven feather on the floor to pick up, and the crowd are represented by a curtain.
You can move the curtain aside, but will need to cut it to take it with you.
He won't let us speak to Nuri - try offending his ears.
Use your flute on the raven to get rid of him, then speak to Nuri.
All that's left now is to cut the curtain.
You still have your magical abilities, even in the dreamscape - look for something to smash that will yield sharp objects.
The carney's campfire had a bunch of strange hanging objects; one of them must prove useful.
Use the 'smashing' ability on the hourglass hanging by the campfire, then use its shards to cut at the curtain.
You should now have five items that represent the traumas in Geron's nightmare.