Why did George Orwell use dreams to develop character personalities rather than using other techniques in "1984?"
Orwell utilizes dreams and fantasies throughout "1984" because the subconcious, where dreams occur, is one place where Big Brother can't peer, and fantasies because that is the only apparent way to escape the totalitarian system in which the characters live.
While the system is determined to monitor every individual every second, including the individual's thoughts, the deeper within the subconscious one's thoughts occur, the more secure they will be from detection. As the consequence of saying or thinking the wrong things can be lengthy prison terms or worse, the only way to communicate potentially subversive thoughts is through the deepest recesses of the brain. And, the only way to escape the omniscient repression and surveillance is through dreams and fantasy. Dreams are Wilson's link to the past, against which he measures the declarations of the government.
At one point in the book, O'Brien comments to Winston in the latter's dream that they will meet one day "in a place where there is no darkness." Orwell intends the story's "doublespeak" to apply to the concept of darkness as representative of the repression under which all live as well as the perpetually bright prison cells where darkness is prohibited lest prisoners "escape" through sleep. In one context, darkness is bad, in the other good.
The dream-state is often a useful tool for writers of fiction, as it provides the freedom to go where reality would otherwise not permit. In Wilson's dreams, he can contemplate a better existence, at least for a while.