I appreciate the question, though I will not have much time to answer it here.
In short, in its context, the statement is about God’s disposition and attitude toward you, not about an ontological/cosmological change in your substance as a human being. It is the same thing St. Paul says, for example, Galatians 2:20:
“I have been crucified with Christ. It is no longer I who live, but Christ who lives in me.” (Galatians 2:20 ESV)
And 1 Corinthians 1:27:
“Now you are the body of Christ and individually members of it.” (1 Corinthians 12:27 ESV)
In these, and other such texts, the imputation of Christ’s righteousness to us is such that God does not see our sin, but see’s Christ’s active and passive, obedient humanity.
Similarly, the language of headship in Romans 5 demonstrates our unity with Jesus’ humanity:
“But the free gift is not like the trespass. For if many died through one man’s trespass, much more have the grace of God and the free gift by the grace of that one man Jesus Christ abounded for many. And the free gift is not like the result of that one man’s sin. For the judgment following one trespass brought condemnation, but the free gift following many trespasses brought justification. For if, because of one man’s trespass, death reigned through that one man, much more will those who receive the abundance of grace and the free gift of righteousness reign in life through the one man Jesus Christ. Therefore, as one trespass led to condemnation for all men, so one act of righteousness leads to justification and life for all men.”
In God’s sight, you have been grafted into the new vine of humanity, the root of whom is Jesus. Therefore, in God’s sight, when he sees you, he sees you as one with Jesus, in the same way that you are born sinful from the flesh of Adam. This does not make you God, and certainly leads to no deification, as the Eastern Orthodox wrongly teach. But it does instigate a great mystery of the new unity between God and man in the incarnation, even as St. Peter points out:
“He has granted to us his precious and very great promises, so that through them you may become partakers of the divine nature, having escaped from the corruption that is in the world because of sinful desire.” (2 Peter 1:4 ESV)