So what seems to be the strategic reasoning behind allowing you to respawn once when you die? And where do you respawn once you lose both your lives?
I'd also like to know how you progress in the world. Is it level based like Nioh or massive connected areas like Bloodborne? Game looks amazing but I feel like I'm going to suck at it.
It's an interconnected world, like Bloodborne, but more specifically like Dark Souls 1, with a bit more non-linearity and giving you choice on how you want to progress. Bloodborne was connected, but the main path was pretty linear with some branching optional areas. The idea is that, by being able to create your own route throughout the world, you'll be able to have access to different ninja tools, which will impact the way you play and explore the world.
About reviving, do you mean from the developer's perspective or from ours? For the player, the most common strategy will be to let enemies turn their back on your corpse, revive and backstab the same enemy that just killed you.
For the devs, Miyazaki stated that the reasoning behind creating the mechanic in the first place came from the combat and the figure of the Ninja. They wanted their protagonist to always be on the verge of death, the fights were a constant clashing of swords, with both trying to get that one decisive blow. They did that a little too well, however, and that resulted in people dying a lot. Since you have stealth mechanics and whatnot, that ended up hurting the game's pace, since you were always sneaking around redoing encounters over and over again, so they just decided to create the revive mechanic.
If you die without any lives left, you'll go back to the previous statue.