Virtual reality (VR) technology has attracted increasing interest as a medium for architectural design and experience, enabling users to interact with immersive digital environments that simulate reality in real time. This study introduces the DREAMSCAPE framework, which adopts a direct manipulation approach and emphasizes embodiment, experience, and manipulation activities during the design process. This framework aims to facilitate intuitive interactions beyond the preconceptions of traditional computer-aided design (CAD) systems. To demonstrate and establish the framework, an experimental VR design tool named Dreamscape Bricks VR has been designed and developed for this study in Unreal Engine 4, employing LEGO bricks as base components to create a high-fidelity interactive design environment. To compare the design processes between physical and virtual mediums, design experiments were conducted with a group of 14 participants consisting of architects, graduate students, and undergraduate design students. Each participant was tasked with designing a shelter and a pavilion, once using physical LEGO bricks (in situ) and once using the Dreamscape Bricks VR tool (in virtuo). The design processes in both the physical and virtual mediums were analyzed through video recordings of the participants, retrospective think-aloud protocols, and post-experiment surveys. The participants' cognitive design processes were evaluated using the Function-Behavior-Structure (FBS) framework and linkographic entropy analysis, while the Embodiment-Experience-Manipulation (EEM) taxonomy was developed to conduct a deeper analysis of the design activities observed in the session recordings that could not be reflected in the retrospective self-reports. The results revealed comparably rich cognitive design processes in both mediums. However, the VR medium exhibited significantly higher levels of embodiment and experience activities. Notably, manipulating user scale within the VR environment introduced unique design opportunities, facilitating a dynamic exploration of spatial design at various scales, which is unavailable in the physical medium. Overall, this research offers guidelines for VR design tool development, focusing on more intuitive, immersive, and user-friendly experiences. The findings of the design experiments provide insights into the use of VR and metaverse environments in architectural design and education. By offering a more immersive design experience through designing while being present inside, similar to dreamscapes, VR has the potential to unlock novel creative opportunities and enhance the design process.