The Enterprise becomes stuck in a nebula that is home to an alien consciousness that traps the crew in a fairy tale.
Okay, I'm going to say this first - I've never really liked these kinds of episodes - the classic Star Trek holodeck episodes like Voyager's "The Bride of Chaotica!" or "The Killing Game" and The Next Generation's "A Fistful of Datas" or "The Big Goodbye," or DS9's "Take Me Out to the Holosuite." They usually do nothing to move along any "arc" story, are at worst, a comedy "filler" episode that gives the actors a chance to dress up, and at best, only a device to character build, by deliberately having them play against type.
While there was comedy, character building and playing against type here too, this episode was a little different:
Firstly, there is no Holodeck involved as it hasn't been invented. Instead this had strong links to the DS9 episodes "Far Beyond the Stars" and "Shadows and Symbols" where in Benjamin Sisko's visions from the pah-wraiths he assumes the identity of Benny Russell. The book which Rukiya wishes to change the ending, The Kingdom of Elysian is written by none other than Benny Russell himself!
Secondly, it actually did progress that "arc" story of Doctor M'Benga's daughter, Rukiya, and brought it to a conclusion in a most unexpected way. After the previous episode 1.06 showed a civilisation that gave the doctor the possible access to advanced medicine, I had naturally assumed that some medical cure to her illness would be forthcoming eventually.
Thirdly, the choice that M'Benga must make is an unbelievable difficult one - to keep holding his daughter in the pattern buffer while he searches for a cure, or allow Rukiya to join with the entity and truly live even if it means it will be without him.
And finally, that parallelism between King Ridley's dilemma with the Mercury Stone, and M'Benga's internal struggle with letting Rukiya go was cleverly done.