In your very question you have most of the context you require:
Then God said, “Let us make mankind in our image, in our likeness, so
that they may rule over the fish in the sea and the birds in the sky,
over the livestock and all the wild animals, and over all the
creatures that move along the ground.”
The image of God relates to humanity's role and relationship with creation, compared to God's. God is the creator, who lovingly brings everything into and upholds it's existence. Mankind in the image of God is entrusted with the stewardship, Lordship, vice-regency, etc over creation. We are to tend to God's world, taking care of it and organising it, so that it "works" (for lack of better wording ><).
I understand God's image as this very status of being God's stewards of his world.
? why isn't it about us being 'spritual' like God is?
Well, other beings exist which are spiritual.. but not in the image of God. i.e. demons.
? why isn't it about our trait or capacity to think, reason, love, obey God, free will, xyz......?
1) Slippery slope, as then any person without capacity xyz then becomes sub-human using that definition. e.g. somebody who is not smart, somebody who is disobedient, somebody who medically cannot empathise. Depending on the capacity you choose determines who you consider to be a lesser, inferior human.
2) Angels seem to have all of the human capacities, yet are not in the image of God.