Why does it make more sense to believe that entire creation must be inside the Creator and not outside of Him?
There's a philosophical problem with the idea of something being outside the Creator. Such an idea ends up shifting the ground under very notions of the Creator's Infinity and Oneness. To say that any entity has an outside also means something else. Namely, that the entity also has a border, which could allow for something to be outside. Any entity which has a border cannot be Infinite, as Infinity means borderless - no beginning, middle or end.
When Westerners contemplate infinity, they most commonly tend to think mathematical infinity - "oodles of numbers" spanning out forever in both the negative and positive directions. However, the Creator's Infinity is more than that. His Infinity is not mathematical, but, rather Absolute. Even when math is highly abstract, it still functions as a measure to constrain entities into individually parceled forms. Absolute Infinity is the very opposite of constraints. In fact, it transcends any notion of measurement altogether.
Part of transcending measurement is freedom from anything measurable. Something is measurable when it has a beginning, middle and end, i.e. boundaries or seams. This excludes the possibility that the Creator's Being includes parts or pieces, for what identifies a part or a piece is that it’s a defined fragment with a beginning, middle and end.
In the absence of parts or pieces, the Creator must be Absolutely One. Any of the many versions of oneness that humans can conceive are merely relative ones because they are composed of parts. They are not in states of true oneness. For example, one finger is composed of many cells, which in turn are composed of an many orchestras of sub-cellular components, which are in turn composed of a dazzling array of organic molecules, which are in turn, are built from complex arrangements of an unimaginable number of atoms. Each of these atoms themselves are smears of sub-atomic components. Even the most fundamental sub-atomic components of these atoms, still contain individual beginnings, middles and ends. Each beginning, middle and end itself contains its own beginning, middle and end. Drilling down to the smallest drop of energy/matter still yields a divisible entity. There's no entity in all of reality which is perfectly "one", other than the Creator Himself. Every other entity that's referred to as "one", is just borrowing the word as a convenience of speech.
In fancy English such a perfect Oneness is called a "non-composite unity", i.e. devoid of parts or pieces. The notion of Perfect Infinity ends up meaning the same thing as Perfect Oneness, as without borders ends up also meaning without parts or pieces. Thus, the Creator is Infinitely One!
So where's the world? If it's outside of Him then a boundary has to be introduced and we can no longer truly say about Him that He's Perfectly Infinite and One. The only option left is to say that the world is inside of Him. However, doesn't a world inside Him create the exact same problem, by introducing a boundary, only this time inside of Him - a hole inside Infinity?
The answer to that question all depends on how the world is inside of Him. If a space needs to be carved inside the Creator to house the world then that would be logically problematic for two reasons:
A) The Creator is beyond space. Carving a space into Infinity is essentially trying to carve space into non-space. This doesn't logically work. It’s like trying to carve a physical ball into thought.
B) It would also introduce a "hole inside Infinity", a finite island in the midst of an Infinite sea. This introduces boundaries, undermining the whole notion of Infinity.
However, it actually turns out that the Creator's Oneness and Infinity exists undisturbed by the presence of world. How? It works by the world being seamlessly continuous with Him - like a thought which is seamlessly continuous with a thinker or a dream character in seamless continuity with a dreamer. The thinker or dreamer doesn't need to compromise the presence of his/her core identity to make room for a thought or a dream character. The core identity doesn't get in the way of these mental processes. So there's no need to withdraw to allow them to occur. The core identity runs through both the thinker and the thought or the dreamer and the dream character equally. Similarly, there doesn't need to be a space literally carved out of Him for the world to exist because the world is Him.
The world doesn't look that way to us because our sensory perception limits what we see. Our partial view makes what's a whole, appear fragmented - what's seamless riddled with seams. This partial view fosters the illusion of independent entities. It obscures the view of connections and continuity leading to a seamless whole. The entities themselves are not illusions, just a series of partial views - lulling the viewer into the illusory experience of the finite.
Since finite is about variation and change, there are a large variety of experiences of our world, which creatures perceive as neatly framed examples of what it means to be finite. These experiences of the world depend on an individual creature's perceptive capacity.
Humans perceive a physical universe, precisely responsive to known laws of physics. Souls and angels have higher perceptive capacities than humans and perceive the exact same universe as a spiritual realm. Since souls and angels exist on a wide variety of levels, each level has its own unique perceptive capacity. To lower souls and angels our universe is perceived as a lower spiritual realm. To higher souls and angels our universe is perceived as a higher spiritual realm. The same universe perceived with a different set of perceptive capacities literally becomes a "different realm".
Beyond the perceptive ranges of the highest souls and angels exist pure divine forces. These forces are not as affected by the illusion of separation because they experience themselves as mere appendages to what's beyond their perceptive range - like an arm experiences attachment to its own the body. However, their perception still has boundaries. Like angels and souls, these forces also have levels and levels of perceptive range. There are higher forces which are beyond the perceptive grasp of lower forces.
Beyond the perceptive ranges of the highest forces is the Absolute Oneness/Infinity, i.e. the Creator. At this very highest level, there's only Him. Anything else, no matter how spiritual, loses any semblance of individual identity and becomes like a ray of sunlight living within the body of the sun. All other identities are seamlessly absorbed in their Source, without even a lingering trace. Multiplicity yields and disappears into Oneness for truthfully there never was any multiplicity to begin with. On this level it's clear that there's only the Creator and nothing else.
This is why I was once taught by a teacher that when the Jewish mystics, whether Prophets or Kabbalists, entered into a higher realm they didn't "fly" there. Rather by attaining a heightened state of holiness, they expanded their perceptive range until they were just there.