Disagree with the bold part. To me, Madrid is just a massive series of in-fighting and stupid power struggles, a club made up of a bunch of wimps who are more concerned with their own place in the pecking order (on and off the field) than winning anything as a team.
I believe that true character is shown in times of adversity, and in those times the people throughout Real Madrid show themselves up for what they truly are.
If I was a player, I don't think I'd be able to see past that. The prestige of playing for a great club would not overcome the day-to-day shit there. Hardly "living a dream".
I actually think Isco would be better going somewhere like Atletico - guaranteed first team football at a high standard, playing champions league and not in the middle of a circus. I think it would be far better for his career long term.