The statement "I am the Lord" reminded the people of their covenant relationship with and responsibility to Yahweh. [1] It was because He is who He is that they were to be who He wanted them to be. It was a constant reminder to the Israelites of who they were and whom they served. [source][source][source]
"Fundamentally God is holy because He is unique and incomparable. Those whom He calls to servanthood must therefore understand their holiness not primarily as some king [2] of "spirituality" but as their uniqueness and separateness as the elect and called of God. But holiness must also find expression in life by adhering to ethical principles and practices that demonstrate godlikeness. This is the underlying meaning of being the "image of God."" [3][source]
The promises of life for obedience ( Leviticus 18:5) held out a positive motivation for what follows. [source][source][source]
"No, Leviticus 18:5 does not teach salvation by works. It teaches that the OT believers who trusted God and obeyed him from the heart received life abundant both here and hereafter. Actually, Paul was saying, "The Pharisees and the Judaizers teach that the law offers salvation by works, but that is a misuse of the law that cannot contradict the promise of grace" (cf. Galatians 3:12; Galatians 3:17)." [4][source]