Our concept of space if wrong

One thing we know for fact is we occupy space (assuming we exist, maybe we could draw an anology to a program her, does it occupy space? later!), everything occupies space, the pen does, we do, the sexy girl on the street does and so on, moving it another level, the earth occupies space, the solar system does, our galaxy does and so on. Whats the end to this? Right now its difficult to hazard a guess because we have been told that space is infinite, but logically nothing thats physical is infinite, even space, well then you might raise the question maybe space is finite but not bounded, i.e. its infinite in our dimension, example a sphere in the XY axis it is infinite, but not bounded, only in the Z plane do we realize that its not infinite (I once had this fantastic dream that i set out in one direction to find the end of space and found myself back where I started, similar to starting off on a sphere to find the end of the world where I could fall off, with some amusing consequences of meeting a ray of light I had emitted long ago, anyhow) so then we can say in our three dimensions there exists something like a sphere to make it feel infinite (cut out to another dream I had where i mapped out some star configurations from one horizon and found them to be mirror images on the other side (mirror image through a different plane, like a 2d mirror makes left right an right left, similarly a different mirror plane would rotate the configuration differently, hence what we think is infinite is infinite reflections like a kaleidscope)

I degress, so if we take this space, what ever unbounded infinite thing we get as a unit, then there must be something beside that, above that, under that (not the kamasutra again!), or something enveloping that, and something envoloping that that and so on, untill, again, that goes on to what we perceive is infinity, and since infinity doesnt exist, that would bring us back to where we started.

This seems infinitely bizzare :), hence i feel that we have missed a turn somewhere, our whole concept of space is wrong, there is something fundamental we are missing, maybe we do not exist, but lets consider the program mentioned earlier above or objects in a java code, say it was alive, it would think that it occupies space, because in its world it exists (forgive me if you are getting flashbacks of the matrix) but it is a good anology, the program does use space in the computer and uses a lot of the resources etc, the computer might go bust and everything is a big bang, or the program can go on till eternity till there is power (very eerie right, just like we and the earth) so this program thinks it occupies space and this space is infinite, and say it figures out that it is finally encased in a computer like object, it has no way of finding out what is outside the computer, us, just as we cant figure out what is outside our universe, so this theory of space is the same however you tink of it, matrix, real life, etc etc the probelm of infinite space still exists even if we belive we are imaginary or exist in a matrix, so I disassociate myself from the matrix theory, my problem of space till exists.

Is it a case of the program not knowing whats outside the computer, or is it a case that our whole concept of space is wrong, we need to dig deeper in a different direction because our present direction will only lead us in circles of an 8