Yep. I ran it as once the PCs had the signet ring in hand, the sun just starts to dip below the sunset in slow motion as the scene between the Viscount and his beloved plays out, and then they dance for as long as the PCs were willing to watch. Time moves weird, here.
Agreed. Dreamlands physics are not real world physics in the least. It tends to parallel more than say, the First World, because the Dreamlands is still effectively a conjured mishmash of permanent dreams from various mortals. But that doesn't mean you couldn't end up in an area of the dreamlands where the volcanoes erupt ice cold lava. While the first world tends to be "blatantly wierd", the Dreamlands (in my opinion) should be "unsettlingly unusual".
So yeah, time doesn't pass in Celephais unless it does. Simple as that. My players initially hated that, because it didn't make sense, especially when I just shrugged when they asked what happened to the sun if they left the city and came back several hours later. But after a while they realized that lack of sense was exactly what was great about it, what makes it memorable.
It sticks in your mind and bothers you, subtly, gently, until you forget, or confront it. Like any good Lovecraftian element should.