I haven't unlocked everything quite yet but just beat it the other night. There's multiple references to "going to the country" throughout the game, at first it just sounds like death, yes, but then it starts to seem more literal the more it gets brought up. That final fight, the reaction caused by returning your Transistor into its cradle sucked/blew both you and Royce into the country, which still isn't clear if it's literally just country or another state of being.
The obvious theme throughout the game is computing, all your abilities are named like programming functions, everything in the OVC terminals is measured precisely, the backstories you unlock by using the abilities gives a lot of credence to the "inside a computer" theory, but it could just as easily be a computer-like society. Despite the computing theme, the people and citizens still clearly feel emotions and differently than one another, but everything is tabulated considerably more than currently possible in our society. It could be a social commentary on where we're headed with things like big data.
The people inside the cubes at the last fight I feel like were people that got absorbed by the Transistor (or possibly other Transistors from other places or times). The typical "death" appears to just be the country, where Red and Royce end up, free and able to act. When the Transistor absorbs someone, they get isolated, removed from the usual flow of things, but still exist to some extent as themselves. When Royce said he looked into the Transistor, it looked like he saw the sky... the forms inside the cubes give the appearance of looking up, into the sky, so it could be he was seeing through one of their eyes.
Things definitely are very fuzzy and abstract for a society that appears very structured and rule-bound. I never felt like the game wasn't giving me enough though, quite the contrary. I felt like it was way more fleshed out than Bastion ever got to. You find out exactly what happened in Bastion (racists blow up the world) just as you do in Transistor (powerful, bored, rich white people want to control everything but their tool gets out of hand), but the world of Bastion never really gets fleshed out even as much as Transistor. Things are vague but I imagine that's to avoid contradictions or unneeded stupidity that could come out of getting too specific.