Must a "target creature" be on the battlefield?
Yes, it does.  The rules say:


  109.2. If a spell or ability uses a description of an object that includes a card type or subtype, but doesn’t include the word “card,” “spell,” “source,” or “scheme,” it means a permanent of that card type or subtype on the battlefield.


i.e., "creature" can only mean a creature permanent on the battlefield.