Dear Karen,
Your contribution to our motley collection of essays here is much needed. You give a clearer picture than most physicists could give of what they're looking for in a fundamental theory, and I think it's important to understand how little clarity there is about this. To me what's most striking about physics is how much our current theories can explain about the world, while seeming to leave us almost clueless as to why a world should be based on such strange foundations.
I want to mention that your excellent paper on "Decoupling emergence and reduction in physics" is directly relevant to this contest, since these two notions come up in many of these essays, and are usually taken to be directly opposed. Also, I was very glad to find your book/thesis on "Effective Spacetime" - it's rare to find such in-depth discussion of recent physics that a non-specialist can follow.
I was interested in your comment, "The requirement of unification is hard to justify. Given that our manifest experience of the world is of diversity rather than a sameness of phenomena, seeking an explanation of heterogeneity seems counter-intuitive--surely a unified description would be more striking than a disunified one, and cry out for explanation?" Later you answer this by suggesting it's the "business of physics" to "explain diverse phenomena by appeal to simple, universal laws." I can't argue with that - and certainly the quest for unification has led to many an outstanding discovery, most lately in the Standard Model. But in my current essay I've tried to show that neither unification nor naturalness are reliable guides to a more fundamental theory. The essential argument is that diverse interaction-structures are necessary to make any kind of physical information measurable, or even meaningfully definable.
I really appreciate the kind of work you're doing, digging out the real conceptual issues within the technical struggles of current research.
Conrad