On physicality of art, I dont think the fact that a work of imagination creation qualifies as physical due to the fact that when creating the work it is done first in one's mind then executed to reality by physical object(s). Take for instance the creation of songs, most of the process is mental and though it could involve physical acts, that may not necessarily qualify the work to be a physical object.
The aesthetic qualities that qualify a work of art to be an artwork purely remain to the credit of the audience/client. A work of art and its qualities that rate it highly vary from one event,occassion or client to another as well as the guidelines laid for the creation of that work. This argument can be based on the famous saying that 'beauty is in the eyes of the beholder.'