Dear Jonathan -
First I'd like to congratulate you on your highly engaging prose. You've taken great care to express your views cogently, and this makes your far-reaching message very forceful and significant.
You state: 'In considering the question "It from Bit, or Bit from It?" one must always ask 'With respect to what?''
Indeed, Physics needs to revise all its assumptions before it can consider foundational questions. It and Bit might seem to have set identities to those who consider them through a prism of unquestioned assumptions - but in reality, as you say, they are interchangeable.
In my essay, I describe It and Bit as 'correlated' by evolution. You say: 'Though we imagine there must always be an 'It' if information about an object or 'Bit' is detected, this is actually a learned behavior - but it is one acquired very early in our development.'
I would add - ' ... and, even before - over the course of our evolution.'
Your description of childhood habituation is very pertinent, and the process-like nature of Chinese and Native American languages provides a fascinating insight. I show how the 'process' begins with the appearance of life on the planet: Ultimately, 'matter' is simply very ancient information, supported by appropriate biological configurations. The entire system is continually shifting.
When you say - 'Maybe there is something unifying 'It' and 'Bit' we need to examine', it jumps out at me that this can only be the evolving observer. It wasn't long ago that evolution entered into human consciousness: Pre-Darwin, the order of things was entirely created by God. But to deny or ignore evolution in our interpretation of the physical world is no longer possible: It places physics in a mystical position - for we are indeed subjective to the Cosmos, our view at any given time is partial, and shifting - and therefore we cannot see the 'whole thing', and we must also somehow configure continuous change into all our conclusions and 'facts'.
In this broader perspective, the definition of It and Bit clearly must be expanded to something more than Wheeler intended. They are involved in a 'cosmic dance', as you say (a dance choreographed by evolution, I add). The presence of mathematics in the cosmos represents how intimately invested we are in the field of observation.
I don't want to recap my essay here; these few words are really about you, and how thoroughly interesting it was for me to read your essay and see the many similarities in our 'dance steps'. This was particularly evident to me in your concluding remarks.
Of course, I've rated your work highly - and I hope you'll soon read my rendition of the 'ancient tale', and give me your impressions.
I wish you the best of luck in the competition,
John.