For me, witchcraft is animistic, as well as mystical. There is a reason there is no dichotomy for me. As an animist, I understand the world to be inspirited, animated with the movement of sensuous intelligences at every scale of being.
In the cosmology posited in many traditional witchcrafts (particularly the lore of the major initiatory Houses), the shape of reality is a 3-ness: the Underworld, the Middleworld, and the Supernalworld. Because this shape exists at every scale, it is reflected in the notion of every entity (parts of the Whole) having 3 souls or selves, native to each condition.
The Fetch or Dreaming-Self is native to the Underworld, the Aura or Waking-Self is native to the Middleworld, and the Daimon or Immortal-Self to the Supernal. It's interesting to note that many ancient peoples understood the Celestial realm as a special place within the Underworld, the Stars within the Earth. I myself have seen the Door at the Bottom of the Wyrding Well (the Deepest Depths of the Great Below) that opens into the Great Above, a black sky of Utter Night and the Silvery Stars twinkling therein.
Typically I refer to the Underworld and the Supernal as the Vertical-Axis, the Innerworld from whence everything comes and returns to. All of reality is movement to and fro. I understand this place in the "Middle" as the Horizontal-Perceptual World, where time appears to move in one direction just as the Sun crosses the sky East to West, from horizon to horizon. Here we spring up from the inside of a body, are birthed and grow and perceive, unfolding our lives before sinking back into return/decay at Death. The Whole is the Crossroads, the place where the Vertical-Axis and the Horizontal-Perceptual meet, and center defines circumference.
I believe that the Fetch visits the Vertical-Axis nightly, in dream. That the dream condition and the death condition are the same. When we die our Fetch will go to be with our Ancestors from whence we extend, while our Breath Soul (for most), our waking consciousness and colorful weave of identities, will depersonalize and return to the Wind of the World, the thunder/perfect mind of the Master. Our Daimon shall guide the Fetch home. Only those most favored by the Elphen Queen will escape this Fate.
But let's return to the topic at hand. In dream we have a body, though it easily shapeshifts, and is also primarily ancestral. I also know with certainty that folks who are called witches can enter a twilight-state, the Witching Trance, and use the union of their soul-forces to walk the blade-edge bridge between waking and sleeping in a phenomenon called the Witches' Flight.
This state allows the practitioner to unite the worlds and stand at the meeting place of the axes, in lore called "riding the Hedge," where they can physically affect phenomena in the Horizontal-Perceptual world while effectively "lucid dreaming." Truly this is a state beyond waking awareness, sleep, or even ordinary dream as Chumbley posits. But there is certainly a body that engages these things.
art: Iwona Milewska
For me, there is no such thing as the immaterial, only the living world around us intertwined with the subtlties of the pre-/post-mortem states of consciousness. The cosmos is predatious, eating and birthing itself like Ceridwen eats and births Taliesin. We can experience a body in each of the worlds, and realize there is no spirit without body, there is no substance that is not holy, animate.
It's why, for instance, witches use the senses and the body to engage in sorcery; why materia magica *is* spiritual substance for us. Things are what they do. Everything is a process happening. Every herb and root, water, salt, mommet, tool or implement--they are alive with magic, with life-force, with sorcerous power.
These are beings we weave our spells with, not merely inanimate objects whose symbolism/aesthetic fascinates the mind. Witches use song, dance, sex, fasting, feasting, transgression and ecstasy, the fluids of the body, the parts of animals (other bodies), movements called "shamanic passes," symbols drawn or carved--these all form the "body" of spiritual forces and beings as we encourage them to act in the Horizontal-Perceptual World through intention, desire, will, and relationship (including pacts and bonds). They become a part of us, as the truth of who we are is much more than discrete individuals but morphic fields all blending together into the Wholeness.
We are a train of beings, a chain of ancestors reaching back, and spirit allies reaching forward, all forming the Tree of Life with our rooting and branching. The three selves, our ancestors, familiars, fate-followers, allies--this all forms the greater family that we embody in the here-and-now. Try not to escape into idealism or the fantasy of any other existence apart from the hear-and-now, the world of the senses. It is a trap of delusion and will get you lost in folly and inaction, and split your soul into pieces.