I think what you call interiority is just another realm, but still objects exists there, yet not visible to the eye. Kind of like objects in this universe are the screen and the interiority is the software but we don't see the software when we are using the computer.
I think software and screen is in constant interaction. Is that a loop? Who knows. I think it is a loop. Thru our actions we modify our source code (fine tune our LLMs), and our LLM state determines our next actions pretty much. Time is like a carrier in between these two realms.
Yes, we want the approximation to human value system. Since LLMs are probabilistic it will always be a voyage. Machines should evolve towards being human, not like transhumanism where it is the reverse!