What is the significance of the phrase "Ki Am Kadosh Atah"?
Rashi (in Seifer ha'Pardes): 'If you will sanctify yourselves from all forms of desecration and filth, to be clean and pure before Hashem, He will choose you and your Tefilos ? because He is Holy and His servants are holy'.
Ramban and Seforno: Refer to 14:1:1:5.
Peninim mi'Shulchan ha'Gra (Bereishis 23:2): If one completed what one needed to in this world, there is no reason to cry over the Nefesh, only over the body - "Ki Am Kadosh Atah" (so you need not be so upset). 1
Oznayim la'Torah: With reference to 14:1:4.1:2, the Torah is pointing out that Yisrael are different inasmuch as Hashem chose them to be His forever - even after death - to stand before Him in Olam ha'Ba, 2 over and above all the other nations.
This explains why Avraham did not cry much over Sarah (as hinted by the small 'Kaf' in "ve'Livkosah" - in Chayei Sarah Bereishis, 23:2).
See Oznayim la'Torah. In any event, according to the commentaries, the very term "Kadosh" implies to eternity.
What is the corollary between "Ki Am Kadosh Atah ... : and "u'Vecha Bachar Hashem"?
Rashi #1: 'Because, due to your forefathers, you are already an Am Kadosh; moreover, Hashem chose you ... '.
Rashi #2 (in Seifer ha'Pardeis): 'If you will sanctify yourselves from all forms of defilement and filth, to be clean and pure before Hashem, (for that) He chose you and your prayers - because He is Holy and all His servants are holy.
Why does the Torah mention here the fact that Yisrael are an "Am Segulah" (a treasured or a beloved nation) from all the nations".
Seforno: Because it is due to the fact that they are an Am Segulah that Hashem forbade them - and not the Nochrim - to indulge in these practices.
What is the connection between this Parshah and the previous Pesukim?
Seforno: The difference between Beheimah Tehorah and Beheimah Teme'ah was already known in the time of No'ach, yet when Hashem permitted Noa'ch to eat meat, he did not draw a distinction between them as He is doing now with Yisrael.
