Creation ex nihilo. To say that God creates is to say that beings now exist that did not exist before. Finite beings are not made “out of God”. They are made, produced, created. There is nothing contradictory in saying that a Creator brings beings into being. He makes to exist what was non-existent without the act of creation!
Even the verse that some people use to defend Pantheism, "the whole world is full of his glory," still implies the world is not Him. There are areas where His Glory does not extend to וכבודי לאחר לא אתן "My Glory to another I will not give."
It seems basically clear that Torah does not hold of pantheism. Even Reb Nachman was going with the Rambam on creation ex Nihilo as he says in at least one place in his major book. [I forget the exact place but it is easy to look up with the printed index at the end of it.]
The evil inclination begins at its lowest level in physical desires and goes upwards until it reaches it root in Satan. the higher one goes in the service of God, that the kelipot [dark forces] get awoken every time one reaches a higher level. Putting these two idea together we can understand that as one gets higher in the service of God that the evil inclination that is awoken against him becomes more evil but less physical.