Well, for what it's worth, what people consider the Christian idea of heaven and hell is really a comparatively modern invention pinched wholesale from Greek mythology (and that was mostly because of Alighieri Dante borrowing ideas from the Roman poet Virgil's writings for The Divine Comedy which is what popularized the whole concept - 'Heaven' and 'Hell' being essentially the Greek Elysium Fields and Tartarus respectively with the serial numbers filed off (and Tartarus given a new name taken from the Norse goddess of the inglorious dead for good measure). But I did not come here to get into a theological debate (as they never end well).
Getting back to the FF concept of the Lifestream, the whole Lifestream idea originally came about due to FF creator Hironobu Sakaguchi who lost his mother to a car accident and the grief affected him so much he became interested in the idea of life living on after death, and decided to use that idea as a theme in the then latest FF game that he was developing (FFVII) - FFVII's main writers Kazushige Nojima and Yoshinori Kitase developed this idea from Sakaguchi and Tetsuya Nomura's briefings into the Lifestream concept along the lines of scientists James Lovelock and Lynn Margulis's 'Gaia Hypothesis' (an idea that all life is interlinked on Earth and that, metaphorically speaking, makes the Earth itself kind of a living organism itself).
Nojima and Kitase took Lovelock and Margulis's metaphor and varied it, based on Sakaguchi and Nomura's ideas, making it a literal 'living' being, from which all life is born from and returns to after physical death. The energy that made up a living being's life returns to this mass of energy, but FFVII itself showed that the memories, the will, the very conciousness of that being still lives on within - they are not destroyed (if they were, how did Aeris and Zack return at the end of Advent Children? Or for that matter, how does Sephiroth keep coming back? Because the Lifestream was not an 'obliteration of the self'. The energy that made up your life returns to it, but your memories, your 'self' lives on within. FFXIV just builds further on that basic concept.
Sakaguchi had already touched on the concept of an afterlife earlier in FFVI, this time along more 'Western' lines with the idea of the Phantom Train taking the newly departed to the 'other side', but the Lifestream was when his ideas of life after death took centre stage in his game development (similar ideas also appeared in FFIX and X, along with the much-maligned FF theatrical film The Spirits Within that was developed by Sakaguchi from early scrapped concepts from FFVII).
Also before you pass judgement, the Compilation of FFVII also had a literal goddess of FFVII's Planet... until Zack slew her, that is.
But then FFXIV is a work of fiction so it's not meant to be taken that seriously, it is entertainment. I guess being agnostic it's easier for me to accept these ideas at face value and correlate them to my own beliefs, but that is something I will not be getting into).