A modifier is a word, phrase or clause which speaks about or describes another word in the same sentence. Confusion results when a reader cannot tell to which word a modifier is attached. A modifier must clearly modify a word in the sentence.
In the first sentence, the writer reports the minister as talking about the "cost of living with several women," which was not the actual subject of conversation. In the correct sentence, the phrase "with several women" has been moved closer to the verb, "chatted," which it was meant to modify and, as a result, the meaning becomes clear.
In the first sentence, the phrase "waking in the night" modifies "the fire engine," technically saying that the fire engine woke in the night. The modifier is dangling at the beginning of the sentence with nothing to modify.