Neil Diamond's "Shiloh": Real or Imaginary?

In Neil Diamond’s song, “Shiloh”, is this person real or imaginary? Initially, he sings “Papa would love to be with you, if he had the time. So, you turn to the only friends you can find. They’re in your mind…” OTOH, as the song progresses, it seems Shiloh is a real person especially when he sings “Had a dream that filled me with wonder, she had other plans. Got to go, said she knew that I’d understand…”

Is the latter quote above not to be taken at face value? Are we, the audience, to assume he is taking poetic license about outgrowing his imaginary friend, perhaps? I am not sure how to interpret this. What is your take on this?

Imaginary friend.

http://www.songfacts.com/detail.php?id=11834

My interpretation is that Shilo is an imaginary friend. When the narrator grows up and has a real relationship, Shilo is forgotten, but when the relationship fails, the narrator is reduced to wanting his imaginary friend back.

Sorry, I am just getting a chance to stop in. Thanks all for the explanation!