I.e. Where exactly does God live? (Isaiah 57:15) 15 For thus saith the high and lofty One that inhabiteth eternity, whose name is Holy; I dwell in the high and holy place, with him also that is of a contrite and humble spirit, to revive the spirit of the humble, and to revive the heart of the contrite ones. PROBLEM: Isaiah speaks of God as “the High and Lofty One Who inhabits eternity.” Yet John claims that “God is with men, and He will dwell with them” (Rev. 21:3). Is God in eternity or in time?
ESV - 15 For thus says the One who is high and lifted up, who inhabits eternity, whose name is Holy: "I dwell in the high and holy place, and also with him who is of a contrite and lowly spirit, to revive the spirit of the lowly, and to revive the heart of the contrite.
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I would say that God is omnipresent, including indwelling (in the Person of the Holy Spirit) each individual believer. However, when Jesus made references to His Father's abode or house (as in John 14:2), He was referring to a specific realm that is currently outside the dimensions of earthly space and time. At the close of the age, a new heaven and a new earth will be established, on which God will dwell eternally with the redeemed (Revelation 21:1-4).
My opinion is that it is not either eternity or within man but both. In the passage referenced in the question itself (Isaiah 57:15) God specifically states that he "inhabits eternity" (ESV) and that he dwells "also with him who is of a contrite and lowly spirit" (ESV). The KJV similarly agrees that God says he both inhabits eternity and also lives with people who are contrite and humble. I believe Isaiah subtly conveys the idea of God's omnipresence through God saying that he "dwells in the high and holy place" (KJV/ESV) at the same time that he is also dwelling with the contrite and lowly/humble. John 14:7 describes the difference between God living with us and God living within us. God has always lived with the contrite and lowly/humble (Isaiah 57:15) but Jesus says that God not only lives with his disciples, but will "be in" them. This most likely refers to the promise of the Holy Spirit (see Acts 2) who now dwells within those who by faith are disciples of Jesus.
The meaning of transcendence is that it is a theological term referring to the relation of God to creation. God is “other,” “different” from His creation. The way I heard it in seminary is that He is “wholly other.” He is independent and different from His creatures (Isaiah 55:8-9). He transcends His creation. He is beyond it and not limited by it or to it. It is difficult when he is “wholly other” than we are. It means that we must relate to him by his self-revelation in the person of Christ Jesus, and through the Bible. All of God is everywhere, in heaven and on earth (Ps. 139:7-10). He is over all and in all. He created the universe and has manifested Himself in it, but He is not identical to the universe (Col. 1:15-16). God is in the world, but God is not the world. Like a painter and his painting, God put Himself in His creation but is still more than it. The Lord is transcendent — high above us as our Lord and Sovereign. The light in the eye can say: I dwell in the eye and in the vast fields of space. The air in the lungs can say the same. We must connect in thought the immanent and transcendent God; Christ in you the hope of glory; Christ as thine and filling all things. If God is thus so great and rich in His revelation to us, then we have explained to us the secret of the power and blessedness of the Christian experience. It is communion with the High and Mighty One that inhabiteth eternity, whose name is Holy. There is much truth in “God’s double dwelling-place.” NG & TH
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