Incidentally, to answer your specific point about what the universe can expand into, the Kabbalah (mystical Judaism) has the interesting concept of "tzimtzum", meaning contraction.

It works like this: in the beginning, there was only God. No room for anything else, so to bring the rest of creation into existence, God contracted a tiny part of him/her/itself to produce a void, no bigger than a mustard seed.

This tiny seed then grew, so that everything that was, is and will be in the universe was contained within that tiny, expanding seed.

God lies outside this seed - our universe - in the Ain Soph Aur (the limitless boundless light).