What is matter?

I'm not certain what you mean. Are you using the word "reality" to mean "the Unvierse as we perceive it?" If that's the case, you're right to say that our experience of the Universe is somewhat illusory. We "see" a very small part of the Universe, being far too large to observe the working of subatomic particles and far too tiny to observe the interactions of galaxies and glacatic clusters. Science has allowed us to glimpse these aspects of the universe, and perhaps the most true thing we've found is that our frame of reference, which determines "common sense," is consistently wrong at those scales due to insufficient information. The reality of the Universe is far stranger than we imagine.Time, for example, is illusory. It's jsut a dimension like width and height, but we experience it differently, and so it seems different to us. It's not. It's the same. Our experience of time as a one-way linear chain of events in the direction of increasing entropy is simply a side-effect of how our brains work - our brains are electrochemical machines and as such require increasing entropy to "function," so we experience time only in that direction at a single rate.Even speed is illusory. Everything moves at a single speed - the speed of light. But just as you can move partially in the horizontal dimension and partially in the vertical dimension, we are also moving in the dimension of time. By increasing your speed in the spacial dimensions, you're reducing your speed in the time dimension - hence time dialation as per general relativity. This is also why the speed of light is the "cosmic speed limit" - it's in reality the only speed that exists. If you could move at the speed of light, time for you relative to the outside observer would stop. Of course, your relative mass increases and approaches infinity as you approach the speed of light as well, so it would require infinite energy to reach the speed of light, but that's another topic.