Is Jewish Election Based on the Physical Indwelling of G-d?

Wyschogrod is fascinating.

He posits that Israel's (which he defines as physical descendants of Abraham, Isaac, and Jacob) unique election stems from the fact that G-d indwells the Jewish body:

"The covenant between God and Israel...depicts a drawing together of God and Israel....[I]n some sense...it can also be said to involve a certain indwelling of God in the people of Israel whose status as a holy people may be said to derive from this indwelling.  Understood in this sense, the divinity of Jesus is not radically different--though perhaps more concentrated--than the holiness of the Jewish people," Michael Wyschogrod, Christology: “The Immovable Object,” Religion and Intellectual Life 3 (1986), 79.

"No space can contain God, he is above space, etc., etc.  But this mumbled formula, while required, must not be overdone.  It must not transform the God of Israel into a spatial and meta-temporal Absolute, in short, into the god of the philosophers.  With all the philosophic difficulties duly noted, the God of Israel is a God who enters space and time, who dwells in Jerusalem on the temple mount and therefore, by his presence, sanctifies the land of Israel beyond any other land on earth.  There are, in fact, two spatial locations of God in the world.  One of them--and the preeminent one--is the people of Israel.  This indwelling is also to be understood, at least partially, in spatial terms.  God dwells not only in the spirit of Israel, in their study and prayer and faith.  He also dwells in their bodies...Because of this dual indwelling of God in the people and the land, when the people of Israel is missing from its land, the land is incomplete.  There is thus a triadic relationship:  the indwelling of God, Israel, and the land," Wyschogrod, Abraham's Promise, pg. 102

So wouldn't that make the Apostolic Writings supersessionist in Wyschogrod's thinking?  After all, the Apostolic Writings indicate that G-d indwells all Believers--whether Jewish or non-Jewish.  Wouldn't such indwelling then eliminate the basis for any distinction between Jew and Gentile?

I'm just trying to follow his lines of reasoning.

I'm reminded of the lyrics of a song from a children's movie about Peter Rabbit that my daughter was watching.  Peter Rabbit was lost, on a journey to find home, and gazing at the moon, sang "so near...and yet...so far."

That's how I feel about Wyschogrod's Theology.  It's very similar to my own.  Except that I see G-d indwelling both Jews and non-Jews, thus bringing everyone into the family of Israel.  Our Theologies are so similar...yet so profoundly different.

"So near and yet so far."