Does that imply that everything we think is real is at least partially an illusion created by our minds?

Complex associations of thoughts, feelings, & responses based on past experience create our personal "reality."  Simply by slowing down and observing, without judgment, the process of the mind we begin to construct a new mindset, one that more and more reflects our present moment experience.  By grounding ourselves in a sense of OKness ("in this moment I am safe, I matter, and I belong, no matter what is being felt or thought") while activating the insecurities of the past our minds can update to a perspective of security. 

What we think we know (beliefs) and who we think we are (identity) are stored networks of thoughts, feelings & actions carried forward from past experience.  So who I am in the present moment is the experiencing of arising thoughts, feelings and actions, both those happening now and stored ones that are being re-experienced. 

As we reactivate stored patterns of thinking-feeling-acting (unconscious material) and re-experience them with an attitude of present moment, nonjudgmental awareness we update our minds and bodies.  With practice, this growing center of awareness gradually incorporates and transforms all past experience, bringing us into a full, timeless, state of being and becoming,  ever more willing to encounter the unfamiliar and unknown.