Absolutely agreed with most of that. I think that LLMs and similar technologies are incredible and have great potential to be components of artificial intelligences. LLMs by themselves are more akin to "virtual intelligences" portrayed in the Mass Effect games, but currently generally with fewer guard rails to prevent hallucinations.
I suspect there may be a few other concurrent "loops", likely not as well compared to LLMs (though some might be) running in our meat computers and their inefficiency and poor fidelity likely ends up being part of the factors that make our consciousness. Otherwise, your approximation makes a lot of sense. Still a lot to learn about our meat computers but, I really do hope we, as a species, succeed in making the world a bit less lonely (by helping other intelligence emerge).