It's super common to hear Christians say that 'What defines us is being in Christ' or 'What really matters for our identity is being loved by God'.
We say it a lot because it's true. And because this is a central and interpreting factor in our identity. The problem comes when this idea is over-stated and over-preached so as to actually erase our identity.
The issue is, 'I am in Christ' does not fully tell me who I in particular am. It doesn't tell me my identity, so as to identify me in distinction from you, him or the the apostle Paul. Yes being in Christ is a fundamental part of who I am. But what makes me Mikey-Lynch-in-Christ as opposed to Don-Carson-in-Christ? What makes me Me-In-Particular?
And this is where we need to own that all our other particularties are indeed parts of our identity. We are, in a sense the sum total of our all generalities and distinctives. I am human. An Australian citizen. Someone who sinned in these ways. Who was sinned against in those ways. Someone who has this patchwork of preferences of dislikes. A person who has been in these places and seen these things. I am someone who has these abilities and incapacities. All of these things go into making me me.
To deny these things play any part in my identity is not only oddly irrational, but also denies that all these things are also the work of God and of Christ. He is the creator. To be loved by God is to be loved as a particular creation he made and placed in a certain place in the time and space of his creation.
So what does it mean to say that 'we are first of all loved by God', or 'the key thing that defines us is being in Christ'? What we properly mean is that these things are fundamental, central, defining and interpretive. I am MORE defined by being in Christ than by being in the lowest maths class. I am MORE defined by being loved by God than by being a sinner. Being a Christian is more important than being a member of my biological family.