^ But the fact remains, within the fictional reality presented by the show, only one character - Russell or Sisko - can be real. Either Russell is dreaming up Sisko, or Sisko is dreaming up Russell. Logically speaking, both cannot be the case simultaneously.
I don't see that we have to make such an "either/or" choice. The episodes where Benny Russell appears intentionally blur the lines so there is no way to identify one character as more real than the other. The ending of FBtS is pretty explicit on this point: maybe I just dreamed up Benny, or maybe Benny is out there somewhere dreaming of us.
And then again in Shadows and Symbols: the scripts for DS9 episodes are scrawled on the walls of Benny's cell and he is just trying to "finish the story." And when he writes that "Sisko opens the orb box thing," that's exactly what Sisko does. So Benny could just be a vision of Sisko's, or it could all be a story being told by Benny. Either interpretation works fine, it just depends on how you look at it.