You amaze me Hank, rarely does anyone think so clearly. And state it so clearly.
Now, the interesting thing here is that the strict materialist believes that material existence is all there is, and except for those things which are concepts, nothing else exists, and from that view reality and material existense or the material universe are therefore all there is and the equivalent of reality.
The problem I have with this is that one cannot make the 'strict materialist' statement in all honesty. There is no way any one person, or even humanity as a whole, can know enough at this point to assert that the Universe is 'strictly material.' In fact, in light of recent theories and discoveries, it isn't material at all, but nearly entirely energy. Even material is a form of energy - E=Mc2. So accusations as to what 'materialists' believe are over rated, except for those materialists foolish enough to embrace them.
The rest of your comments on consciousness fall along these lines. I look at the idea of 'materialism' the same way present physicists look at Aristotle's 'Earth, Air, Fire and Water' definition of reality. We already know this is an outmoded model. The 'immaterial' aspects of reality, such as the wave interference that generates a hologram, are as 'real' or even more so, than the 'material' of a proton, which can be converted to 'immaterial' energy at any point.
And you are right, the implications are tremendous. But as long as we seek to force our new concepts into old bottles we will never arrive at the way things really are. That there isn't an 'essence' of cat 'uniting' with something in the mind doesn't mean there isn't something 'nonmaterial' animating the cat.
I live by the ocean by choice for one of these reasons. I love to go out on a pier and look at the waves as they travel into the shore. Try and wrap your mind around what is happening there and you will see that there is an element to reality that is 'non-material' that passes through us every moment of every day. The best word we have is 'process' but that says so little.
There is so much more to the mystery here than most are willing to consider. And that, I think, is the issue. It is much more comfortable to think you have all the answers given in a little black book somewhere than to really contemplate the mystery. Takes more courage than most have.
"Diamonds are found only in the dark bowels of the earth; truths are found only in the depths of thought." -- Victor Hugo, Les Miserables, Signet Classic, page 231