Where does the phrase 镜中花，水中月 come from?
It comes from an idiom 镜花水月（jìng huā shuǐ yuè）


  For example: 《说岳全传》第六一回：“阿弥陀佛，为人在世，原是镜花水月。”《白雪遗音·玉蜻蜓·游庵》：“我和你镜花水月闲消遣，何必名贤胜地逢。”


镜子里的花；水中的月亮。  Flowers in the mirror, moon in the water. I think the translation illusion is proper in your case. You can also translate it as unpractical, unrealistic.


  Provenance:
  唐·裴休《唐故左街僧录内供奉三教谈论引驾大德安国寺上座赐紫方袍大达法师元秘塔碑铭》：“峥嵘栋梁，一旦而摧。水月镜像，无心去来。”