The Alter Rebbe addresses this question in ch. 36. He explains that G-d’s purpose in creation is that He might have a dwelling place “in the lower realms,” specifically, in this physical world. In this world of doubled and redoubled spiritual darkness, His Ein Sof-light would radiate even more powerfully than it does in the higher, spiritual realms through man’s transforming the darkness into light.In man, the microcosm, the animal soul and the body, are “the lower realms.” Therefore, the practical mitzvot which draw the light of the Shechinah upon them constitute man’s ultimate purpose.Furthermore, through the practical mitzvot and through their elevating effect on the body and animal soul, the material world in its entirety becomes a “dwelling place” for G-d.