The purpose of the creation of this world is that the Holy One, Blessed be He, desired to have an abode in the lower worlds.
Tanya, Chapter 36
In creating a dwelling place for G-d, there are two points:
A) The dwelling place is for G-d—in His infinite, transcendent existence
B) This abode must be in the physical world.
Jewish Souls
These two above ideas—that there be a dwelling place for the Almighty and that it exist in this physical world—are expressed as well in the difference between the souls of the Jewish people and the physicality of the world. Ultimately, G-d’s desire for a physical abode on the elemental level is His wish to dwell within the souls of the Jewish people.
To reside and dwell within the souls of Israel...that the congregation of Israel be a dwelling place for His resting.
Hemshech 5666, Pg. 468
While G-d desired that the world be a dwelling place for His Presence, His ultimate wish is to reside within the souls of the Jewish people. The reason for this is as follows: the Jewish people are, in their essential identity, one with the Almighty, and they are therefore the ideal abode in which He can dwell completely. They are, so-to-speak, one with the Essence of the Almighty and therefore the true place that can serve as an abode for the essence of G-dliness.
The dwelling place, however, must be created specifically through work in this lower world, through causing the physical to become a vessel for serving G-d. For it is particularly through the efforts with the mundane that demonstrate the reality of the Jewish soul being ultimately one with G-d.
In other words: The unity between the Jewish people and the Almighty is most pronounced in working to transform the physical. For, this truly brings out that there is nothing that can separate the Jew from their connection to the Almighty. Not only does the mundane not serve as a deterrent for them in their service of G-d, but on the contrary, the physicality itself is able to be transformed into a G-dly dwelling through a Jewish person’s efforts. Instead of being brought down by the physicality around them—they, instead, transform the physical into holiness.
