>Can humans turn into angels/demons?
Angels and humans are fundamentally different. When an angel wants to learn about something, they learn absolutely everything about that topic. It's possible for humans to spend years learning a topic however and still not know everything about it. One will not become the other, no. Fr. Ripperger has a nice video about this:
https://www.invidio.us/watch?v=8WMjnJmgpn4
>Also is occultism as we know it just totally fake?
According to Catholic Exorcist Fr. Ripperger, absolutely not. He claims that originally, in the pornography industry, the producers would bring in occultists to place a curse on the master copy of a video of pornography. Then, when they reproduce the master copy, the curse is transferred to all of the future copies thereby negating the need to curse each and every copy. Fr. Ripperger talks of men who, after viewing a particular pornographic video, became obsessed with the actress although I cannot remember how Fr. Ripperger or the victim discerned that this obsession was in fact diabolical in nature. He touched upon it in one of the videos in the "Spiritual Warfare" playlist on the Sensus Fidelium YouTube Channel. You can find the playlist by simply searching "sensus fidelium spiritual warfare" on YouTube.
Supposedly, the music industry at some point started to adopt the practises of the porn industry with regards to cursing the master copy.
So yes, the underworld is real and sometimes Jesus allows people to get affected by it.
Demons are extremely legalistic and so when you start dabbling in the occult, start believing the teachings in those books, you give demons permission to have power over your life and Jesus will allow it.
If such issues were not serious, why would the Church laud St. Michael?
>OT law and Catholic law forbid it and most of those usually serve utilitarian ends
Why are you posting with the Roman Catholic flag when you're looking at the laws of the OT and Church through this secular, utilitarian lens? It's like you have no faith that the laws serve God's glory. I mean, through a utilitarian lens, it makes no sense that the use of contraception is forbidden and yet NFP is acceptable since ultimately, both have the end of preventing the creation of further children.
>like heterosexual marriage because it creates children
Through a utilitarian lens, wouldn't it make more sense to allow polygyny since one Catholic man could create a greater number of children to pass his faith down to if he had more wives?
>And how important is the imagination and dreams?
The imagination is a good faculty but one should be careful with it. Any imagery you expose yourself to can be evoked by a demon.
>I've had many occasions where imaginary scenarios my head conjured up ended up becoming reality.
Demons are able to implant thoughts in our minds, yes. Demons have a perfect knowledge of the present moment as well as a perfect knowledge of time leading up to this moment so, with their Intellect (Adam and Eve, before the Fall, were just below the lowest angels in Intellect and Adam and Eve, according to Fr. Ripperger, had an IQ of around 200), they're able to make very good predictions. I believe when angels want us to think of something, they do something different to the demons. They kind of lead us to it rather than outright plant the thought. I haven't heard the relevant lecture in a while now but yes, it's possible that these experiences you've had were demonic in nature. Since you have not progressed very far in your prayer life, it's most likely that these experiences were not of holy origin at all.