As in Freddy Krueger. Riff's great-grandmother is Sheah(as seen in the Christmas picture), a nightmare-inducing sorceress. Further along down the line, the magic gene decreased so that all he can really do is delve deep into the minds of his victims and create a fictional scene involving their worst fear/s. Much like, well, Freddy Krueger. Only Riff can't actually hurt them. Any pain they might feel isn't real.
As for the thing on his back..that's what I think is called an ID pak. I'm not really sure what it's actually called in the show..I just read a post somewhere that said that's what it's called. I have a habit of not believing fans..as they have created their own words for various things in the show. (such as baby Irkens. I forget what they called them, but if I recall correctly, in the show, they always just said "baby") All Irkens have them. I have no idea what the actual purpose is, or why they all have them, but it's a nifty little tool, that's for sure. :3