Are we saying that this “Strange Loopiness\ is responsible for self-replication and sentient thought?
In a sense, yes. There are many ways one can look at this: sentience is a result of evolution having formed a Strange Loop between the primitives of the brain (namely the neurons) and the mind itself. This reasoning is somewhat circular, but if the mind is built up in some sort of a bootstrapping process (a collection of experiences accumulating), then the loop could start off very simply between primitives (no loop) and one end remains constant and the other gets more complex (one end is the actual hardware, and the other is what happens within the hardware). The increasing complexity gives rise to these universal truths that can’t be proven by the system (say, consciousness), because by doing (formalising) so, the system (the brain) itself is rendered inconsistent. Note that the system becomes powerful in increasing steps, and it can (and is, in a sense) be formalised initially. This is somewhat like saying that sentience is a consequence of Gödel’s incompleteness theorem, i.e., what