What I am seeing is a 'I' which owns this body/mind but is definitely separate from all other things in the world. My experience shows that there is a separate me which is at a distance with say this computer and other people with whom I interact daily to carry on living. This does not seem to be a fantasy or concept of the thought but looks a sure fact.
What is the nature of this I you are refering to, where is it, and what does it consist of? You already said its neither the body nor the mind (brain).
Put some time into looking at this. This sentence is really all you need.
Here again I agree to what you say about thoughts and experiences. But denying them both and saying there is only experience I am not able to understand.
The mind made I can never understand that, because that would mean seeing it for what it truly is. You can't understand this intellectually with your mind made self, you have to see it. Intellect is actually another hindrance, just as seeing with the eyes happends, there has to be seeing how the mind made self is fictional.
My experience shows that there is definitely a experiences i.e., me on one side and the entire world on the other side, how can that be an imagination of a thought.
How can there be anything that is separate from the world in which all things are? Where could the separate you have come from if its not even part of this world?
The thought that I am watching the hands and other thoughts arising shows that thought is real, but how does that make 'I' an empty belief. And what do you mean by reality.
The thoughts themselves are real, what they point to or create, are not. If you have a thought about a blue tree, the thought itself is real, but the blue tree is not. When you have a thought about "you" watching the hand, the thought itself is real, but they have a faulty premise - that there is a separate you that is having that thought.
The I is an only an assumption, nothing else. It is a premise for which your actions, perceptions and thoughts are based. A premise doesn't have to be true.
Do you actually cause hearing? Or does the ears hear by themselves?
Do you pump your blood? Or does the pumping of the blood just happen on its own?
Do you make your eyes see, or do the eyes see by themselves?
When you walk, do you consciously decide how to move your legs, or do they just move?
When you breath, do you consciously cause that breathing or does it just happen?