He is thinking about the best of all possible worlds, which, indeed, seems quite possible, right now. He is thinking about a firm job, one that will make him worthy of Anna and her father. Gregory remembers the balcony. He remembers what was said, remembers it like a bad dream. Gregory thinks about all the things that have happened this night, all the happiness, all the sharing of emotions.
Nobody can act that well, it's just impossible.
She must be expressing her feelings. It has to be, I had to have imagined it all in the moment after I asked her to dance. We went dancing immediately afterwards, so I can see how the episode would fit in. It makes sense. I imagined it, it's obvious to me now.