Not exactly... physical reality stays unchanged with respects to laws, appearance, etc. The thing changeable are situations in which you are involved since we have the power of choice.You can imagine yourself acting to certain things in a certain way and then do that or you can give yourself positive thoughts which might actually change the outcome of an event but thats it. You cannot imagine an object appearing and it will appear for example.
I have experienced myself, and know people who first put a lot of intention into their "imagination" and managing to manifest their "imagination" in physical reality. The power of intention. Attracting people you want to attract, situations, events, job, money...etc.Yes, objects - visualization is a very powerful tool in terms of accomplishing your goals.
Secondly if you merge imagination with reality you might developer emotions because of what your imagining, which is a really bad thing. For example if you imagine doing a crime and feel guilt about it....
Oh! That is really really bad

yikes!!! I better not imagine galloping on horses through green fields or being happily in love because I might experience some severe positive emotions, which will make me feel really good...and oh jee...I better not do that and stick to this wonderful physical reality we have here on earth...it's just so positive I can't get enough of it

You have to keep imagination and reality separated, they are different. Imagination tries to mimic physical reality until you make a conscious decision against this. In both cases you have to accept that what you imagined isn't the real thing. In the first case only the experience which you will receive from external stimuli in the physical reality will count and the second case doesn't exist in physical reality.
First of all - I don't HAVE to do anything.
Second - I don't see any reason to keep them separated as long as I'm sane,happy, have a job, pay taxes and good friends and people to talk to.
Third - Actually...it's the physical reality mimicking the etherical, as for 3rd dimension is a lot more dense than lets say 4th (where most dreams/ imagination come from) a good example is Kirlian photography (
http://www.totse.com/en/fringe/fringe_science/kirilia.html "If portions of the physical body are cut away, the energy matrix or "phantom" of the missing part is still clearly visible in the photograph, although there is no tangible, physical substance there." Also, any healer, aura reader, will tell you that an illness can appear in the energy field weeks and even months before it appears in the physical body ( great book, Vibrational Medicine, Dr. Richard Gerber, "The etheric body is a holographic energy template that guides the growth and development of the physical body." )
only the experience which you will receive from external stimuli in the physical reality will count .
I simply cannot agree with that because it means that all dreams, visions, obe's through which I gather very useful and practical information to use in my physical reality are worthless. And hey, I'm not the only one! Ask any artist or genius where he gets his information from...surely not from a book - everything appears first in the higher realms and then is manifested in the dense 3D reality.
Don't think this is true? Please imagine doing your favorite activity, it will not be as satisfying as the real thing.
No, I don't think it's true - I often receive a lot more satisfaction imagining the action than actually doing it in the physical

Really!
To actually feel it completely you have to do it in the physical reality.
Wow!!!!?

??
Now imagine flying, feel the rush of the wind etc. have fun with this imagination. Now stop and realize that you can't do it and feel the frustration. If you would accept the imagination as reality you might jump from a building thinking you can fly..... some children actually did that.
I don't get frustrated because I know I can fly in other realities than the physical...actually it's simpler than walking!

I won't jump from a building because I understand the laws and limits of this reality.
Oh well, I'll start giggling too....
No point in battling with rationality...
Good luck with everything...
To finish I have a quote by Robert Monroe which I'd like to dedicate to you Mydral from the very bottom of my heart ... honestly
" For those who die, there is life.
For those who dream, there is a reality.
For those who have hope, there is knowledge.
For those who explore, there is eternity."