Quick question! Dream is technically not human. He's technically not anything. His physical form is what the person seeing him expects him to look like. Some people see him as a young black man, some an emo white guy. Martians apparently see him as a giant floating Martian head that's on fire. You know, normal things. He can shapeshift freely in dreams, but in the waking world he's kind of bound by what people expect to see when they see him.

So if he were being seen by a mermaid, would he already be a mermaid? Or would he still need a kiss?