Is any place perfect? Probably not, but this speaker seems to think Innisfree is. But hey, we're all guilty of a bout of nostalgia now and then. We take a place we remember fondly and embellish it in our minds until it becomes the best place in the world—our own personal fantasyland. Our own Innisfree.
Line 1: Okay, while this line doesn't come off as too "head in the clouds," listen to the tone of it. Would you ever say, "I will arise and go now, and go to the grocery store." We don't think so. Just the way the line is constructed, its diction and repetition, lets you know Innisfree is a pretty important place.
Line 6: The speaker imagines that peace actually drops from the metaphorical "veils of morning." This is definitely dream-like.
Line 7: Have you ever noticed that, when a character on TV or in a movie goes into a dream, the camera often gets all fuzzy and soft-looking? This is the same kind of picture Yeats is painting here with "glimmer" and "purple glow." With every line, the place seems less and less realistic.
Line 8: This is a cool image, but it's totally exaggerated. How can an evening be filled with wings? Sure, a bunch of birds can fly around and the sky can be full of them, but this appears to be another example of embellishment for fantasy's sake.
Line 12: Here we see where the dream stems from. Instead of saying he can hear the water in his mind, or memory, he says he hears it in his heart. The heart is known less for its rational decision-making and more for its emotional urges.