The identity between Atman and Brahman can be fabulously explained with an example of a piece of printed textile with lots of flowers.
Imagine a piece of a textile with colored flower garden. The various flowers together form the flower garden with multiple plants, a variety of flowers of different shapes, sizes and colors.
Let us say this flower garden is similar to the entire cosmos. (jagat) The individual flower representations an individual name and form (nama & rupa) of conscious beings (jiva) including inert objects.
The foundation or the essence of this flower garden is a thread. (yarn) There is no other existence in this cloth other than the thread. If we remove the thread, the garden vanishes and nothing remains!
When we do not see the thread and see only the colors, patterns, sizes, we see the flowers in the garden. None of these would exist without the thread.
The analogy is that the thread is the God principle, Isvara. Without this God principle there would be no world. The individual jiva with varied names and forms form the total concept of the world (jagat). If we take away this Isvara, the entire pattern must perish, just like the garden of flowers ends with the removal of the thread.
As we go deeper, the thread is made out of cotton. It does not exist by itself. From the perspective of flower garden the thread is the cause. But what is the cause of the thread? It is cotton. Without cotton the thread would not exist. Without cotton both the thread and the garden would not exist!
Through cotton, both the thread and garden sustain, exist and into the cotton, the thread and the garden of flowers merge.
The relationship between jiva and every object (name and rupa) and Isvara is the relationship between the garden and the thread.
Jiva is the individual flower, the garden is the jagat and the thread is the Isvara. The cotton is the Brahman is Sat-Cit-Ananda principle.
The cotton, which is the basis for the individual flower, is also the substratum for the whole garden. Cotton is the cause and is alone there. We give the name 'garden' at one stage, 'thread' in another stage and 'cloth' in a different stage. According to our own changing perspective the same cloth gives different impressions at different times – either as individual flower or group of flowers.
When we observe this garden closely, we will see the thread, when we see more closely; we'll have the vision of the cotton. Having once seen the cotton, we no longer see the difference between the individual flowers or colors or shape. In the same way, once we have the vision of the Reality / Brahman, the plurality of forms and names merges into the Substratum, Brahman.
This is the exact meaning of the verse 1 in Isha Vasya Upanishad. Verse 2 provides a different approach for people who are unable to have Isvara drushti, or think that is not practical.