The importance of sleep (which occupies about 1/3 of life) can only be understood once it is established (at least in outline) what is the importance of life itself - I mean mortal life as-a-whole.
My understanding is that this life is sandwiched between a pre-mortal spirit life (which goes back to the beginning of everything), and a post-mortal incarnated life (which is eternal); among the purposes of this life are to be incarnated, to die - and be resurrected, and to have experiences from which we may learn towards our ultimate - and remote - destiny (if we choose it, and keep choosing it) of divinity as sons and daughters of God.
In this context, sleep is one of the experiences from-which we may learn and develop.
Therefore sleep should be considered an activity - indeed it is (at least) two kinds of activity: deep sleep and dreaming sleep.
If we take things at face value - we are absent from our living-bodies during sleep; the body is alive, but pretty much cut-off from its surroundings, neither perceiving nor capable of purposive activity. So our conscious-self is absent, elsewhere during sleep - and this is indeed our subjective experience (insofar as we remember it).
Deep and dreaming sleeps are, in many ways, opposite experiences.
In deep sleep we seem to experience very simple states in a slowed-up time; such that when we awaken from this slow time-bubble, more time has passed in the rest of the world.
In dreams we are in a sped-up time bubble - our subjective experience in dreams is 'compressed' into a much shorter period of awake time. In contrast to the strong, basic emotional states of deep sleep; dreams provide social and narrative-type experiences.
Where do we go when asleep? Well, when we sleep we return to the spirit state of our pre-mortal existence; so our conscious-self is no longer localised in a body. We go into the universal and universally-accessible spirit world - inner space (as it used to be conceptualised); an unbounded space within everyone; but not contained by them; so it is a single space into which each person is a 'portal'. (e.g. The ancient Egyptian dwat, Jung's collective unconscious - same thing.)
By these sleep experiences everyone has a rich and various life; and sleep life is both complementary to and deepening of awake life. In sleep we can access our own experience, and universal experiences - this mortal life and the Heavenly world of pre-mortal life - also the persons of God, angels, the dead... (Some of whom are misguided and some of whom are evil.)
Thus sleep enables deepening and contextualising of our experiences: sleep makes us wiser persons (if we allow it).
Yet sleep itself is not profound, or not always - and thus we reach a point when the work is done, the sleep experience sufficient; and we awaken (or should awaken) to engage with the different experiences of awake life.
We typically remember little of dreaming sleep, and even less of deep sleep (where there is not much to remember) - we do not remember but we do learn (if we allow ourselves). Sleep affects our behaviour, and it affects us as persons - whether we can recall anything or not.
But the direction of human destiny is towards greater consciousness, so we should expect to become more aware of sleep and have more memories of it; as we progress spiritually through our mortal, and post-mortal, lives...