Thanks Frcmger, I appreciate the comments and you might enjoy reading some of the articles in the book on panentheism I refer to. Keith Ward (Oxford philosopher) brings up the issue of the "body of Christ" as a way of understanding how the physical world might in some way be considered a body of God. Arthur Peacocke also explores to some degree the question you raise noting that the body can be diseased but it also has remarkable healing powers. Those could be within the body but also outside in reference to transcendence.
I'm not sure I agree that evil is purely a matter of consciousness. Was there evil in the world prior to humans with their conscious awareness of it arriving? The image of a T.Rex tearing into a gentle brachiosaurus comes to mind. I suppose the question is sort of like the tree falling in the forest. Evil exists as observed, but the pain experienced by those serving as meals for predators might be an example of observing. Not sure.
Your comment about God seeking the creatures uniquely created in his image wanting us to become responsible adults, or choosing rightly with the free will we have, is certainly true in my mind. Thanks for the comments.