My theory is that the assimilation rate is him (a player) being assimilated into being an NPC in this video game world. Once the assimilation hits 0%, he becomes a player once again. He unlocks more and more skills as his assimilation rate goes down because he's a player, and the respawning is because he's a player.
Gods and Goddesses (or administrators) are enslaving the player characters for whatever reason, and wiping out their memories. Maybe they're stuck in this realm, maybe they live in a dystopian future where they're being experimented on. Maybe this is the Matrix.