The great thing about “rightly dividing the word of truth” is the clarity it gives on all the scripture.
God’s purpose in and through the Nation of Israel is the earth and placing His Kingdom on the earth. That is clear even from the prayer the Lord Jesus taught in Matthew 6:10.
On the other hand, God’s purpose for the Body of Christ (who we are) involves reconciling the heavens back to his authority.
The purpose of the Body of Christ according Paul’s epistles is for the heavens. II Corinthians 5:1 says our house and new home is “eternal in the heavens.” I Thessalonians 4:13-18 says when the rapture occurs and we meet the Lord in the air – “so shall be ever be with the Lord.” We are with Him in the heavens. This is why I Corinthians 15:40, 49, 50-53 teaches we must be changed to “bear the image of the heavenly.”
Ephesians 2:5-7 says: “Even when we were dead in sins, hath quickened us together with Christ, (by grace ye are saved;) And hath raised us up together, and made us sit together in heavenly places in Christ Jesus: That in the ages to come he might show the exceeding riches of his grace in his kindness toward us through Christ Jesus.”
In the “ages to come” (plural) meaning the tribulation, the 1000 year reign and the eternal ages that follow we will be seated in heavenly places as a testimony of God’s grace.
It is God’s intent for the Body of Christ to fulfill His purpose in Christ to make Him preeminent in all things (heaven and earth) and to reconcile all things in heaven and earth to himself according to Colossians 1:15-20. The heavens will be reconciled by the Body of Christ. That is why we are raptured out of the earth and into heaven – see Ephesians 1:22, 23.
Revelations 12:7, 8 says: “And there was war in heaven: Michael and his angels fought against the dragon; and the dragon fought and his angels, And prevailed not; neither was their place found any more in heaven.” The reason their place is no more found is because the Body of Christ has filled them.
Now concerning salvation. You are right! According to Ephesians 3:1-5 this is “the dispensation of the grace of God.” Grace is God’s undeserved, unmerited favor toward us. We don’t earn it. God’s favor comes through Christ and His work on the cross. In order for it to be grace, it cannot be of works – see Romans 11:6. And since it is by grace, faith is the only way of receiving God’s salvation – see Romans 4:4,5.
Both the above questions come together in Ephesians 2:5-10. We are seated together in heavenly places in Christ as a display of God’s grace (to the angelic beings) and in order to be a display of grace we can only be saved by grace. That is why Ephesians 2:8,9 begins with the word “For.”
“For by grace are ye saved through faith; and that not of yourselves: it is the gift of God: Not of works, lest any man should boast.”