..the difference between something that happens in "reality" and
something we imagine with emotional intensity - examples of this
please in particular activities I can do with people to demonstrate
this

Try the 18th century philosopher David Hume's 'Enquiry Concerning
Human Understanding' Chapter 2. He makes a distinction between
impressions and ideas. An impression is the immediate sensation of
being in love, feeling angry etc. The idea is the same feeling
recollected or imagined, It lacks the vividess of the original
impression.
Amber

Tell your assistance to close his eyes. Convince him that you are
holding something very hot with a pair of tongs. Now touch an ice-cube
to the back of his hand and release it quickly enough that it doesn't
leave any water behind (thus giving it away). For all practical
purposes, your subject will be convinced beyond a doubt that he has
just been burned, simply because he imagined it to be so.

tutuzdad-ga