Thanks for the questions Winston. Some of these are questions which puzzle me as well, and I realise I will never get the full answer to them until I pass over. In absence of that I have to rely on the testimony of others, especially NDE'ers. Yes, most people are selfish, greedy and materialistic because they are on the lower planes. One thing that all NDE'ers and Astral projectors report that as soon as you enter the astral everything becomes more alive, more vivid and we feel a lot less heavier. On the other hand, if you are caught up in the infra levels of the astral, it becomes even more horrific. This is where the nightmares take place and many people who go on bad trips on drugs go. When we pass over, it is said that we go to that plane which we are most attuned to.
Regarding space and time in the higher planes. This is a difficult question and the answer is relative. It seems that in the astral there is no space and time, as you can fly around at will, go forwards and backwards in time, use your will go anwhere you want. At the same time there appears to be space and time, because you still have an awareness of body, space and temporality. Moreover, there are even higher planes above the astral such as the mental, causal and spiritual. A story is told in the Hindu Puranas which maybe quite illuminating. It mentions how a king visits the highest plane Brahmaloka and waits there watching a musical performance by celestial dancers, the king then asks the god Brahma that he wants his counsel on a suitable husband for his daughter, at which Brahma laughs, telling him in the short time he spent in Brahmaloka, eons had passed on Earth. This would suggest that time flows at different rates in each plane.
Now, the question to be asked is do the astral planes actually come into existence on creation or are they eternally existent. An answer answer to this is given in the Purusha Sukta in the Rig Veda. The Purusha Sukta says that all of reality consists of 4 parts, of which only 1 part is constantly being projected and created and destroyed, whereas 3/4th always remain abstract, hidden and eternal. In other words the astral plane and its many levels is eternally existent. There is this very interesting notion in Vedic thought that the physical plane is the most important plane for self-development, designating it as the plane of action, and is the plane where one can deal with karma. It for for this reason even the gods desire to incarnate here.
Your other question was why would anybody in their right mind incarnate in some third world country, as a mentally or physically challenged person, or within a dysfunctional family, or during a time of great strife. Surely, everybody would want to incarnate as royalty. However, we are only saying this from our current perspective where things like having a beautiful body, a great mind, a royal family and living in a comfortable age seem desirable, we are not looking at this in terms of soul entities, to whom what is pleasurable is not necessarily good. The soul works in terms of dealing with karmas and it chooses bodies which can help it deal with karmas. When the soul passes over it reviews its entire life for the progress it has made, and based on that review, together with support from its guides, angels and well wishers, it chooses a new body. In this phase the soul also enjoys or suffers the results of its actions in the various planes for its recent actions, as preparation for the next. As the soul passses through these various stages in preparation many years are passing on Earth, and then the soul chooses the right vehicle through which it can best work out its karma. Sometimes, the soul may choose parents or siblings to whom it has karmic issues to resolve with.