At the time of Abraham, humanity had fallen into a state where love was felt and shown little beyond family and kin. The Hebrew people were to be preparatory to God’s revelation of the availability of the Divine Love. Therefore they had to be made aware of their potential for human love. In other words, God’s purpose in choosing Abraham, Isaac, Jacob (renamed Israel), and their descendants was to elevate a part of humanity into an awareness of their souls’ essentially loving nature – with the human soul being made in God’s image. Also, they were to realize their relationship to the one true God – being the people of God and children of their Heavenly Father – see for example, Gen. 17:7; Ex. 4:22; 6:7; 29:45-46; Lev. 11:44-45; Isa 63:16. In fact, Israel was metaphorically God’s firstborn, with by implication, other children – other nations – following suit.
So God called out first an individual with a wife, which then miraculously became a small family, later an extended family, which had ultimately grown into the twelve tribes of Israel as a part of a greater plan – to foster the expression of the natural love to God and neighbour (Greek philia) in preparation to later bring an understanding of a higher form of love – the Divine Love or agape. While God chose Abraham and his descendants, this election depended on Israel also accepting or choosing God. It was the basis of the agreement with the people, or what we now understand as the Old Covenant (Ex. 19:5; 24:7-8; 34:10, among numerous other passages).
While the laws given to Israel through Moses seem harsh, they actually regulated much greater injustices and barbaric behaviour prevalent at the time. For example, “an eye for an eye and tooth for a tooth” was an antidote to knocking out all of the enemy’s teeth in revenge.
While Israel was a “chosen people”, its election needs to be seen in the context of God loving all people and not showing favouritism. Working with one group was ultimately for the benefit of all as numerous scripture texts show. Israel was the first nation God worked with and gave His law to, and others were to follow. Later, Jesus was the first child of God in the sense of possessing the Divine Love and being born again, and likewise, others were to follow (Rom. 8:29)
When reading the scriptures or any other book, it is necessary to realize the inadequacy of words. They are but man-made tools and of necessity fall short when trying to express spiritual realities which the mind can barely perceive, much less describe.
Reference in addition to personal biblical insights: The Gospel of God’s Love