Yes. Dream Zanarkand is/was actually a real physical location. Think of the city as a gigantic aeon with thousands of small aeons living on it, minus all the super powers of regular aeons. All of it had actual physical mass, constructed from the summoning done by the many fayths in mount Gagazet. This is why it was possible for some of the summoned "aeons" (Tidus and Jecht) to leave "Dream Zanarkand" and come in contact with the rest of Spira.