That's a huge question Ekyu, and I'll try my best to answer it.

There is definitely a correlation between what happens in Lucid Dreams and real life. There is research showing that you can practice guitar in your dream and have that extra practice translate into real life skill.

If you consciously create the worst nightmare possible, then I would expect that you will slowly become comfortable with that situation, especially if you create it 100-200 times. This is all about the process of desensitization that occurs in real life. A shy person can push out of his comfort zone socially enough to become outgoing and comfortable. It's not that the content itself is inherently scary, its the perception of that experience. As a result, confronting those mental images repeatedly will change your perception and thus your experience.

Conclusively, if you are deathly afraid of heights, you can imagine flying or reaching the tops of mountains. If you do this enough and confront that fear (especially in the safe environment of a lucid dream where death can't happen), then I would assume that this would also translate into your real life experience because you are changing your subconscious interpretation of the event/situation.

To answer your ultimate question: I doubt humans could ever be in complete control of our fear, but we can take gigantic strides to overcoming it and facing it. If we feared nothing then we would be irrational, but if we stopped fearing these random mental constructs such as public speaking that have no tangible consequence then our lives could be massively improved. This is essentially exploring and communicating with your subconscious. This type of self-communication is one VERY interesting aspect of lucid dreaming.

Maybe talk to a dream character and ask these questions or search it on google in your dreams.

~CK