I’m not exactly sure the point that you’re trying to make, but I will respond to some of your statements – hopefully they will help.
Could it be that this ‘free will’ is basically all that exists within the physical realm i.e Apparent.
No actually we’re free in both what’s apparent and what’s not. In fact our physical existence might be constrained in various ways, but we’re completely free in our metaphysical existence. For example, if I lose my capability to walk as a result of an unfortunate accident, I have lost a certain level of my freedom, but I’m still free to believe whatever I want.
A person who progresses in the faith, learns to look beyond the apparent to the point when eventually he realises that the real existence is actually that spiritual existence.
I agree to a certain extent, however, I wouldn’t say that a person who increases in faith necessarily arrives at such a conclusion. Such a conclusion only requires one to analyze his/her experiences (both internal and external) at a conscious level. It’s true that religion, when understood properly, puts us on the path of that higher level of consciousness.
This material existence then becomes only a source to observe, acknowledge and enhance your inner better and make it according to how God wants it to be. I mean be in this world fully only to make the next better.
Our religion actually requires a firm balance. We’re supposed to live our lives on earth the best we can, along with a conscious understanding that our lives don’t end with death. Just like we accept certain amount of pain and suffering in our student lives with a long term expectation of having a comfortable future, a similar long term planning is required by religion. Consider this dua that most of us have memorized by heart:
Quran 2:201
…”O our Sustainer! Grant us good in this world and good in the life to come, and keep us safe from suffering through the fire”
Elsewhere in the Quran Allah SWT says that all the beauty in this world is for the believers.
I think that you’re thinking too hard. The matter of religion is in fact much simpler.
As far as the reality is concerned, what we have today is as real as it can be. When we transition to the next phase of our lives then that will be our reality within that context. What’s required of us today is to do the best we can in this life, with a conscious understanding that we have a Creator, and that one day we will be held accountable in front of him on the basis of things that He has already told us about.