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The Spirit Realm is a pocket-dimension just peeled back from our own where ghosts, kami, and various other "spirit" creatures can exist without any of the strain that may come from existing in the physical plane. The caveat is, vision of the physical plane becomes limited to one's shrines, and influence is even more so while within.

It serves as a barrier between the Amaterasu System and the underworld, Yomi, where Izanami still resides today.

If a Kami's physical form dies, they return to the spirit realm, and may not be able to reform another physical body for thousands of years.