nothing but a few months of sleep - time required to shape a new physical incarnation we grant the laws of nature according to our desires. So this is just to change the nature of our desires for the present existence in our body; but for this, we must receive training for our human life. This training can begin at any stage of life - even moments before death - but the usual process is to be trained from childhood.
Srimad-Bhagavatam 2.1.15
But let's get to your questions. The first is: "What am I Is the material body, is it a spiritual soul or a combination of both?" The answer is: You are the eternal servant of Krishna. The body is material. The spirit soul is different from the body. It's not exactly a combination but rather imprisonment. A bit like when pouring the oil into the water, it does not mix with water. Similarly, the soul does not mix with the body, but because of our material consciousness, we are inclined to believe that the movement of the body reflects the movement of the soul. This is what makes us believe that when the body dies, the soul also ceases to exist. The Bhagavad Gita teaches that the soul does not perish with the body. When the body dies, the soul transmigrate into another body, resulting in the attachment to material existence. For this reason the real purpose of human life is to revive the original soul consciousness, Krsna consciousness.
Your second question is: "If this body is a soul, why is she immersed in the material world?" As I explained earlier, the body is not the soul. She finds herself caught in the snares (traps) of the material world because of its distorted consciousness. If some of us think, "I'm American" or "I am Indian," that is because of our altered consciousness. The true nature of consciousness is that of being the eternal servant of Krishna. It's a bit like a mad man who thinks he is a king and believeth be free to do whatever he wants and talk to rhyme. Yet a sane man to unconsciousness laugh.
Our imprisonment in the material is comparable to the actions of this madman. But by applying the treatment of Krishna Consciousness one is free from all these conditionings. If I feel American, Indian or otherwise, and that I agree with this feeling, I will open the way for all sorts of frustrations and anxieties. Krishna Consciousness brings pure understanding of our nature, which allows us to realize that we are neither American nor Indian, but only the eternal servants of Krishna. This brings us to engage in the loving service of the Lord, which is our true spiritual life.