I can't speak to what seeing words means, but I believe lucid dreaming, and developing the ability to be a better lucid dreamer, is a sign of increasing 'spiritual growth' for lack of a better term. It's difficult to point to specifics because a lot of theory around it trends towards woo-woo, but things like vivid colours, numbers, letters, the ability to control dreams and strong recollection tend to be indicators of that. It's a skill we can all develop, but I don't have a strong understanding of it just yet.