The fact the film is silent isn't because of a gimmick. The fact it's a silent film reflects George's state of mind. Most of the film is silent because he's a silent film star. It's where he's most at home, and where he's most comfortable. His nightmare features sync'ed sound (even though he doesn't talk - though his dog barks.) As he grows more and more comfortable with the new sound era, more sounds are introduced (such as his tap dancing.) When he's finally, truly confident in himself again, everyone starts talking, including George himself. On a side note, George does have some basis for nervousness at being in talkies in Hollywood - his French accent is unbelievably thick, but that didn't stop Greta Garbo with her Swedish accent.
The film Tears of Love has a sneaky bit of foreshadowing. One might think that the female lead, tearfully watching George sink into quicksand, is meant to be a parallel to Peppy sadly observing George's decline. But consider that the very next scene has George discovering that Doris has walked out on him — that, clearly, she was packing her things at the same time as the movie was being screened — and then reconsider that the final line of Tears of Love was "Farewell, Norma. I never loved you". That ending reflects the end of George's unhappy marriage, with Doris managing to avoid going down with him.