The foundational rabbinic teaching that grounds the entire discussion is that the Holy One desired to have a dwelling-place in the lower worlds — a principle Tanya, Likkutei Amarim ch. 36 presents as the very purpose of creation, explaining that the distinction of "upper" and "lower" has no validity before Him, since He fills all worlds equally, and that the change wrought by creation is entirely from the perspective of the creatures who receive His life-force through concealing "garments."
Tanya, Likkutei Amarim ch. 37 draws out the practical consequence of this purpose: the goal is precisely to transform darkness into light in the material world itself, so that the glory of God fills this physical earth and "all flesh will see it together" — meaning that action through the commandments, not study alone, is the essential thing, because it is through active fulfillment that the lower abode is actually constructed.
Hemshech Ayin Beis, Bereishit opens by pressing the tension in the opening verses — if God created heaven and earth, how was the earth then formless and void — and concludes, on our reading of the cited page, that divine kingship can manifest in created realms only through a series of contractions and concealments of the infinite light, so that finite existence can emerge and serve as a vessel for that revelation.
Sha'arei HaYichud VeEmunah, First Gate adds the structural mechanism: precisely because God's simple infinite light is wholly beyond any proportion to revelation, He drew forth and emanated the vessels — Chokhmah, Binah, Da'at, Chesed, Gevurah, Tiferet — as the means by which His light could be concealed and then disclosed within created beings "as something" (בבחינת יש), so that His light might ultimately be revealed throughout all particulars of existence.
Likkutei Torah, Bamidbar 8a frames the descent of souls into bodies as a great descent from their source in the supernal Garden of Eden, yet insists that the descent is for the sake of ascent — echoing the same structure in which the world's creation entails concealment ordered toward a higher revelation.
Torah Ohr, Shemot 50c similarly frames the soul's descent to this world as purposeful toward an ascent: beholding the pleasantness of God in the World to Come and in the Garden of Eden, where souls delight in the radiance of the Shekhinah — a delight without end or limit, before which even the suffering of Gehinnom would be worthwhile.
Sefat Emet, Bereishit 5657 anchors the purpose of creation in the concealment implied by the very word עולם (world), derived from העלם, hiddenness — teaching that creation was meant to radiate God's goodness and light into this world of nature, and that all things were ultimately created for His glory, each particular drawn toward its source and unified in Him.
The verse Yeshayahu 45:18 provides the scriptural anchor: God did not create the world as chaos (תהו) but formed it for habitation (לשבת) — a text the Hasidic sources implicitly read as pointing to the positive purpose that lies behind the initial formlessness.
Midrash Tanchuma, Re'eh 1 supplies a complementary rabbinic answer, presenting God as telling Moshe that He created the world only for the sake of Torah — raising the question of how the world can stand without it — a purpose that the Hasidic teaching on the divine dwelling-place presupposes and deepens.
Nefesh HaChayim, Gate I ch. 6 contributes the anthropological dimension: man was created last as an integrating power (כח מאסף לכל המחנות) who contains within himself all the higher worlds and lights, all the upper and lower powers having contributed their essence to his formation — so that the creation of the lower abode is realized most fully in the human being who gathers and unifies all of existence.
Derekh Mitzvotekha, Emunat Hashem illuminates the experiential corollary: just as the soul fills the body, God fills the entire world with His vitality, animating every creature at its own level — the spheres, the earth's power of growth, living beings, and the human soul — so that the world is itself a single great living body sustained by divine life-force.