`I' means the individual self /ego in worldly sense. In pursuit of truth the `I' stands for whole experience of waking/dream. The true self is not the ego, but the formless soul/Ataman. The soul/ the true self sees the `I'/waking/dream.
The Heart: Atman in heart because in ancient days they thought mind was in the heart. Mind can reduce itself to pin point in heart or expand to take in universe. This is for yogic practice only, not of the path of the non dual wisdom. It is useful for such practice to take Atman as being in heart to have a point of concentration, like the heart within as introversion, but it is a mistake to think this is highest.
