These show me we could and did affect the physical world, and we fought with one another, meaning we could make choices, and some chose to act against the will of God.

"And those priests were ordained after the order of his Son, in a manner that thereby the people might know in what manner to look forward to his Son for redemption.
And this is the manner after which they were ordained--being called and prepared from the foundation of the world according to the foreknowledge of God, on account of their exceeding faith and good works; in the first place being left to choose good or evil; therefore they having chosen good, and exercising exceedingly great faith, are called with a holy calling, yea, with that holy calling which was prepared with, and according to, a preparatory redemption for such." Alma 13:2-3

David
If some of the circumstances in which I find myself are based upon my conduct before, where did I begin? When did I start?

John
Well, first of all, there is an eternity of spirit matter.

"Our spirit matter was eternal and co-existent with God, but it was organized into spirit bodies by our Heavenly Father." (Kimball, Miracle of Forgiveness, p. 5.)

"All men were first born in pre-existence as the literal spirit offspring of God our Heavenly Father. This birth constituted the beginning of the human ego as a conscious identity. By the ordained procreative process our exalted and immortal Father begat his spirit progeny in pre-existence." (McConkie, Mormon Doctrine, p. 84.)

"All men and women are in the similitude of the universal Father and Mother, and are literally the sons and daughters of Deity." (The First Presidency [Joseph Smith, John R. Winder, and Anthon H. Lund], "The Origin of Man," Improvement Era, Nov. 1909, p. 78.)

David
If I was born in the premortal world, what experiences did I go through there that provided God with a basis to favor or restrict me in this world?

John
We lived there in the home of our Father in heaven.

"He is a resurrected and holy and perfected man, and we are his offspring. We are his spirit children. He lives in the family unit. We are members of his family. We lived in this premortal life with him for an infinite period of time. We were on probation; we were being schooled and tested and examined; we were given the laws and the circumstances so that we could progress and advance. . . .

"This system was given to us, and for an infinite period of time, we advanced and progressed and did things that enabled us to go along the course leading to exaltation and dominion and godhood. . . .

"In this prior life, this premortal existence, this pre-existence, we developed various capacities and talents. Some developed them in one field and some in another. The most important of all fields was the field of spirituality, the ability, the talent, the capacity to recognize truth." (Bruce R. McConkie, as cited in When Thou Art Converted, Strengthen Thy Brethren, A Study Guide for the Melchizedek Priesthood Quorums of the Church, 197475,pp. 89.)

"Our spirit bodies went through a long period of growth and development and training and, having passed the test successfully, were finally admitted to this earth and to mortality." (Kimball, Miracle of Forgiveness, p. 5.)

"Preexistence is not some remote and mysterious place. All of us are but a few years removed from the Eternal Presence, from him whose children we are and in whose house we dwelt. . . .

". . . We know we had friends and associates there. We know we were schooled and trained and taught in the most perfect educational system ever devised, and that by obedience to his eternal laws we developed infinite varieties and degrees of talents. . . .

". . . When we come into mortality, we bring the talents, capacities, and abilities acquired by obedience to law in our prior existence." (Bruce R. McConkie in CR, Apr. 1974, pp. 1013.)

David
I am to understand, then, that I was born as the spirit son of God in heaven, that I lived there with my Father and mother in heaven and with my spirit brothers and sisters, and that I had opportunities to learn, to be tested, and to develop talents and abilities?

John
That is right. Some accounts that we have of the premortal life teach that we "were on the same standing" (Alma 13:5), and that we were "innocent" in the beginning (D&C 93:38). We were given laws and agency, and commandments to have faith and repent from the wrongs that we could do there.

". . . Man could and did in many instances, sin before he was born. . . ." (Smith, The Way to Perfection, p. 44.)

"God gave his children their agency even in the spirit world, by which the individual spirits had the privilege, just as men have here, of choosing the good and rejecting the evil, or partaking of the evil to suffer the consequences of their sins. . . . some even there were more faithful than others in keeping the commandments of the Lord. . . .

"The spirits of men . . . had an equal start, and we know they were all innocent in the beginning; but the right of free agency which was given to them enabled some to outstrip others, and thus, through the eons of immortal existence, to become more intelligent, more faithful, for they were free to act for themselves, to think for themselves, to receive the truth or rebel against it." (Smith, Doctrines of Salvation, 1:5859.)

Many responded to the spirit of God there. They were favored and foreordained to receive privileges.

". . . And it was on account of their exceeding faith and repentance, and their righteousness before God, they choosing to repent and work righteousness rather than to perish; therefore they were called after this holy order, and were sanctified, and their garments were washed white through the blood of the Lamb." (Alma 13:10, 11; compare McConkie,Mormon Doctrine, p. 477.)

"Now this is the doctrine of foreordination; this is the doctrine of election. This is the reason why the Lord has a chosen and favored and peculiar people on earth; and this is why he said: 'My sheep hear my voice, and I know them, and they follow me.'" (Bruce R. McConkie in CR, Apr. 1974, p. 103.)

David
But what of those in premortality who rejected the Spirit of God and did not exercise exceeding great faith and repentance and righteousness before God? (See Alma 13:4, 10.)

John
They were not able to enjoy the great privileges that others were foreordained to receive. (See Alma 13:4.) They "did not show the loyalty to their Redeemer that they should." (Smith, Way to Perfection, p. 43.)

David
But weren't they allowed to come into the world innocent, too?

John
Yes. They were innocent at the time of their mortal birth. (See D&C 93:38.) Elder Joseph Fielding Smith said this:

"Their sin was not one that merited the extreme punishment which was inflicted on the devil and his angels. They were not denied the privilege of receiving the second estate, but were permitted to come to the earth-life with some restrictions placed upon them. . . . Yet, like all other spirits who come into this world, they come innocent before God so far as mortal existence is concerned, and here, under certain restrictions, they may work out their second estate." (Way to Perfection, pp. 43, 44. Emphasis added.)

Hence, some in this world receive great privileges and opportunities to receive the gospel because they chose to do good in preexistence. Others are limited here because they were not as "noble and great" there. (See Abraham 3:22.)

David
And how does the concept of Israel enter into this?

John
The family of Jacob is somehow involved in preexistence.

"Israel is an eternal people. Members of that chosen
race first gained their inheritance with the faithful in the premortal life. Israel was a distinct people in pre-existence. Many of the valiant and noble spirits in that first estate were chosen, elected, and foreordained to be born into the family of Jacob, so as to be natural heirs of all of the blessings of the gospel. It was to their pre-existent status that Moses alluded when, in speaking to mortal Israel, he said: 'Remember the days of old, consider the years of many generations: ask thy father, and he will shew thee; thy elders, and they will tell thee. When the most High divided to the nations their inheritance, when he separated the sons of Adam, he set the bounds of the people according to the number of the children of Israel. For the Lord's portion is his people; Jacob is the lot of his inheritance.' (Deut. 32:79.) Those of mortal Israel who walk uprightly in this second estate shall have eternal inheritance with Israel in the world to come." (McConkie, DNTC, 2:284.)

David
So the fact that I am here now and receiving the blessings and opportunities that I now receive means that I have already passed the test, under different circumstances and conditions?

John
Yes. And if you succeed here in this second estate, you shall not only be entitled to advantages in the world to come (D&C 130:19), but you "shall have glory added upon [your head] for ever and ever." (Abraham 3:26.)

One thing I noted, however, is how few of those quotes are in scripture. That means the majority of the text, and therefor your conclusions, are not based on canonized Church doctrine. As such, all of it is subject to scrutiny.

"Watch and pray, that ye enter not into temptation: the spirit indeed is willing, but the flesh is weak." - Matthew 26:41, (see also Mark 14:38)

• They ordained "in a manner that thereby the people might know in what manner to look forward to his Son for redemption" (13:2)
  
  
  • The word manner is defined "a way of doing, being done, or happening; mode of action" dictionary.reference.com
    
  • So, the priests were ordained "in the way it is done that thereby the people might know in what way they are to look forward to his Son for redemption"
    
  • So the way that priests are ordained is a symbol teaching us about the mode and manner by which we are to look forward/backward to the Son for redemption.
    
  • Redemption is a fundamental component of the atonement. In this case, we are learning about the eternal nature of the atonement and its ability to extend backward through time. He is trying to explain how it can be that the guilty are able to gain forgiveness and receive the blessings of the worthy before the atonement of Christ had happened. Rather than extending the timeframe prior to the atonement only to his day, (82 years before Christ), he took it all the way back to "the Foundation of the world" when we were all spirits prior the completion of creation.
  
  
• By the time the world was founded some had already shown, "exceeding faith and good works; in the first place being left to choose good or evil; therefore they having chosen good, and exercising exceedingly great faith..." (13:3)
  
  
  • In the pre-mortal spirit world there is opposition. That opposition exists in all things is evidenced by 2Ne. 2:11. This would indicate that opposition exists from the very beginning and as spirits we were able to choose, (according to our own progression and ability to chose), between these opposites, including the Good from evil.
    
  • Choosing evil we would either sin or transgress or simply make mistakes depending on our progression, knowledge and free will/agency.
    
  • Sins would make us unworthy of the blessings of the worthy including the priesthood. As his point is to explain how we can have and maintain the blessings of the priesthood being unworthy on our own merits, this is important to understanding his point. His point also shows us how we can have and maintain all the blessings of the worthy while not being perfect on our own merits.
  
  
• They "are called with a holy calling, yea, with that holy calling which was prepared with, and according to, a preparatory redemption for such." (13:3)
  
  
  • The calling to the priesthood is considered "holy" and given to those who qualify as "Holy"
    
  • The "holy calling" was "prepared with and according to, A PREPARATORY REDEMPTION" for those who are called...

1. What is a preparatory redemption?
   • What does it prepare us for?
     
   • What does it do for us in preparation for the thing that it is preparing us for?
   
   
   
2. As Alma is speaking regarding those who are called to the priesthood, both in this life and also in the pre-mortal life, who is he talking about? Who received the priesthood in the pre-mortal life?
   
   
3. Who can receive the priesthood in this life? Are any exempt such that they cannot benefit from this preparatory redemption?

1. What is a preparatory redemption?
What does it prepare us for?
What does it do for us in preparation for the thing that it is preparing us for?

2. As Alma is speaking regarding those who are called to the priesthood, both in this life and also in the pre-mortal life, who is he talking about? Who received the priesthood in the pre-mortal life?

3. Who can receive the priesthood in this life? Are any exempt such that they cannot benefit from this preparatory redemption?

The redemption of the atonement is to redeem us from the fall. Since we had not yet fallen in the preexistence, no redemption could be complete or final. Thus any forgiveness for mistakes made in the preexistence would be preparing us for the actual redemption in these mortal bodies. The purpose then, would be to teach us how it is done, the form and pattern of it so we could recognize it again in the future.

And the brother of Jared repented of the evil which he had done, and did call upon the name of the Lord for his brethren who were with him. And the Lord said unto him: I will forgive thee and thy brethren of their sins; but thou shalt not sin any more, for ye shall remember that my Spirit will not always strive with man; wherefore, if ye will sin until ye are fully ripe ye shall be cut off from the presence of the Lord. And these are my thoughts upon the land which I shall give you for your inheritance; for it shall be a land choice above all other lands.

Alma Chapter 12
9 And now Alma began to expound these things unto him, saying: It is given unto many to know the mysteries of God; nevertheless they are laid under a strict command that they shall not impart only according to the portion of his word which he doth grant unto the children of men, according to the heed and diligence which they give unto him.

10 And therefore, he that will harden his heart, the same receiveth the lesser portion of the word; and he that will not harden his heart, to him is given the greater portion of the word, until it is given unto him to know the mysteries of God until he know them in full.

11 And they that will harden their hearts, to them is given the lesser portion of the word until they know nothing concerning his mysteries; and then they are taken captive by the devil, and led by his will down to destruction. Now this is what is meant by the chains of dhell.

This could easily be misinterpreted to mean we only really repent once. While this may be your end goal, stated in so short a phrase, it can lead to ideas such as 'God expects me to keep sinning for awhile longer, so I might as well do it.'

'If I haven't had my calling and election made sure, and achieved the final redemption, then I'm only a worthless sinner who will never improve.'