One point about Israel being the "chosen nation"...we shouldn't forget that God didn't choose Israel out of all the other nations like a cosmic eeny-meeny-miney-mo, rather, God chose Abraham who had heard the voice of God and left his homeland in Ur of the Chaldees to go where God led him. It was Abraham to whom God gave the promise that: "and through your offspring all nations on earth will be blessed, because you have obeyed me." (Genesis 22:18)
From Abraham, there came Isaac, then Jacob - whose name was changed to "Israel" - and then through his twelve sons (the 12 tribes of Israel). The Messiah descended through this lineage and ALL the world has been blessed because, For God so loved the world, that he gave his only Son, that whoever believes in him should not perish but have eternal life. .
Interesting to me that you quoted John 3:16, because I am studying the book of John and have just begun chapter 3. What do you believe John means in verse 16, in light of verses 1-15? Is there a need for regeneration before someone will have faith to believe?