You were not hallucinating, that was lightning.
Heavy snow continues through most of the region, and the snow line is pressing toward the Shore.
Snow is accumulating in a hurry in some places, enhanced by such strong updrafts that they are generating a phenomenon called "thundersnow."
Thundersnow is similar to a summer thunderstorm.
Precipitiation falls when warm air rises and water vapor condenses. When it rises violently, colliding ice crystals can set off lightning and the requisite thunder.
In spring and summer, more heat is available for that convection, but thunder and lightning also can occur in winter storms.
Tonight's storm generated numerous reports of lightning sightings.
In thundersnow, accumulations occur rapidly, on the order of 1-2 inches an hour, and sometimes even more.
Right now it would appear that the forecasts of 4 to 8 inches from tonight's action are on target.
If you want to keep track of observations around the region, check out the American Weather Forums site.