My first DS was TRULY addicted to his pacifier. I weaned him from it at 18 months and it was NOT EASY. However, he was (mostly) bottle-fed and I was not altogether AP/NP when he was a baby, so using the pacifier didn't bother me much. My DS is 34 months and DD is 5.5 months - of all the things I have ever had to do with my kids, weaning DS from his pacifier was THE WORST.
Because of that experience (and because of stumbling into AP/NP), I was SO set that DD would never have one. I didn't buy a bottle, I didn't buy a pacifier. I didn't take the one they gave us at the hospital. However, I made DH run out and buy some when DD was 3 weeks old. My oversupply/forceful letdown was just so intense, and poor DD was desperately trying to suck-to-sleep and coming out with a mouthful of milk she didn't want. I tried nursing her uphill instead (on her tummy) but the excess foremilk gave her tummy issues and she wanted no part of that. It's like the instant sleep. Nurse, nurse, nurse, nurse, pop off, get pacifier, pass out.
It made me very nervous and hesitant at first and I was nervous she would somehow love her pacifier, prefer it to my breast, interfere with breastfeeding, you name it. But while I figured out my oversupply issues it was a LIFESAVER. After I got my supply leveled out, she did start occasionally nursing to sleep, which makes me so happy. Mostly, that's just a night-time thing though. During the day, she prefers to nurse, pop off for her pacifier, and use it to fall asleep. She learned very young (maybe 2 months?) to grab her pacifier and put it in her mouth if she wants it, but she generally doesn't after she's fallen asleep (she spits it out).
She went through a short phase around 3.5 months where I was afraid the pacifier was taking over. She wanted it for car rides, when she was upset during the day - I wear her all day, was wearing her for naps, tried laying with her, rocking and shushing her, helping her get gas out, doing little massages, etc... but bottom line, she WANTED HER PACIFIER. My only rule was that I continued to offer her breast first - EVERY time, which is sometimes really difficult (my DS is also a very intense little man), but I stuck to my guns to make sure she wasn't using the pacifier to REPLACE feedings.
It only lasted a few weeks and now it's back to a sleep-aid only. She actually uses it now less than ever and I no longer fear long-term attachment. She likes nursing, she likes nursing to sleep, she likes holding my breast. Her pacifier is SIMPLY for when she wants to suck and nothing else. She will grow out of it, and I don't let myself fret over it anymore. The bottom line for me is that my baby doesn't cry.
As for seeming upset when awake - my DD got/gets this way because there's just too much stimulation sometimes. My 34 month old's day looks something like this... He wakes up screaming "Good mor-mor Jee Jee! Me love you!" and then eats, plays, eats, plays, runs in circles, screams, reads, runs in circles... we go to the park and he runs and climbs and plays and we go for a walk, then we come home and he laughs and runs in circles and eats and then (deep breath!) they both take a nap. then he wakes up screaming "Good mor-mor Jee Jee! Me love you!" and repeat until dinner. Just merely being AROUND all of that can be SO overwhelming for someone so little. I do my very best to implement mandatory quiet times while I allow DD to unwind, especially when she seems overly cranky. When DH gets home, he tries to take DS outside for a bit so DD can breathe in the quiet. It is the one thing that has really improved her daytime fussiness. Life with a toddler is crazy (as mama knows!) and it can be rough on baby, too.
Oh boy this post is getting long but as for laying down for naps alone... When I need her to sleep on her own for whatever reason, the most effective method is laying down with her, nursing her side-lying until she's mostly asleep, subbing the pacifier when she pulls off, and cuddling her for a few minutes. It usually takes about 15 minutes (the whole process) and then I can slide out and hang out with DS or what-have-you.
Well that became ridiculous in length but my DD is so similar! I hope you find some of this to be helpful.