I do the same kind of things, but I usually relate to movie/t.v. characters.

I always thought it was a form of symbolism, that it helped me express how I felt while putting it in different terms. It is kind of like a math equation, where I have all of the answers but prefer to use the variables.

I think you might be right, that it is a way of distancing. I think that it is creative, and that it helps put feelings of interest around whatever the scenario is, and that may be distancing myself from my emotions. I still like doing it, though.