*SPOILERS*
It says the ghosts thrive on attention, so if you don't pay attention they will leave you alone. In reality, they will eventually leave you alone no matter what, and there is a limited number of ghosts per day. This means that no matter what you do, you will eventually be in an empty room and able to fall asleep.
On first playthrough the game can still be pretty spooky, and fun. Not to mention the gameplay is very unique. However, on repeated playthroughs it is painfully obvious that nothing that you do affects anything but how long it takes you to complete each level, there is no way to fail even if you max out your fear meter.
I've completed the game by entering a staring-contest with each ghost, never letting my fear drain and trying to fail, but eventually the ghosts decide I've won and let me sleep.
Also the art is cool.
TLDR The gameplay is an illusion, but at least it's an effective one on the first playthrough.