This is a subject that has been debated since time began. No one knows for sure what reality is.
For the sake of discussion, I will stick to the common sense definition that you and I all exist and our reality is what we sense. However, when it comes to “see/hear what we want to see/hear” there is a lot of room for study. Our senses are filtered through our brain, and who knows what goes on there.
My sister and I were brought up very closely together, yet we remember most events/people differently. She misbehaved a lot more than I did, and remembers our father as a strict, mean disciplinarian. I remember him as strict, but loving and caring. Reality depends a lot on perspective.