Did Allah create Adam (a.s) with physical senses of body?
Indeed Prophet Muhammad ﷺ taught us that Allah ﷻ created Adam in His own image however, this does not mean in physical appearance because Allah ﷻ said about Himself “There is nothing like Him”. There are two prophetic hadith that inform about the creation of Adam (alaihi salaam) being in the image of Allah ﷻ: “...Allah created Adam in His own image (wajh).” In another ones it says, “Allah, the Exalted and Glorious, created Adam in His picture (surah) with His length of sixty cubits.”
Before we discuss how Adam (a.s) was created in Allah’s image we first need to understand what do terms like ‘image’ and ‘picture’ imply in the Arabic language. In both ahadith the terms used for ‘image’ and ‘picture’ are wajh and surah. One of these two terms, wajh has also been used by Allah ﷻ in the Quran for Himself: “but forever will abide Your Sustainer's Self (wajh), full of majesty and glory.” Asad comments on this verse and said: “ 'face’, or ‘countenance’, a term used metonymically in classical Arabic to denote the ‘self’ or ‘whole being’ of a person - in this case, the essential Being, or Reality, of God.” As per Edward Lane’s Arabic-Lexicon the term surah means: “by which a man is especially distinguished, consisting in reason and thought and other distinctive attributes: a quality, an attribute, a property; or a description, as meaning the aggregate of the qualities or attributes.” Since the terms wajh and surah also refer to whole being of a person with distinctive qualities and not just "a face" hence it implies that Adam (a.s) and through him all his descendants are carrying within them special qualities and attributes directly from Allah ﷻ that makes them a distinct being as opposed to all other creation. This is confirmed and better understood in the light of a verse of the Quran pertaining to Adam’s creation where Allah ﷻ said to the assembly of angels: “Behold, I am about to create a human being out of clay; and when I have formed him fully and breathed into him of My spirit, fall you down before him in prostration!”
As the verse informs that first Allah ﷻ created Adam’s body and then He breathed His ruh (spirit) in to him. The angels through the symbolic act of prostration honored him once the ruh (spirit) of Allah ﷻ was placed in him and not before. This special act of honor from Allah ﷻ explains what makes us a special creation as opposed to all other creations. The attributes of Allah ﷻ placed in to Adam (a.s) and his descendants is due to His ruh (spirit) in our body! These beautiful attributes of Allah ﷻ are also referred as 99 Divine Names, as explained earlier. These are encouraged and observable in our behavior such as being kind (Al-Rauf), being generous (Al-Karim), being merciful or having mercy, judging righteously (Al-Hakam), establishing and maintaining authority (Al Jabbar), being knowledgeable (Al Aleem), we see and hear and He is All Seeing (Al-Baseer ) and All Hearing (As Sameeh), He is Forbearing and Gentle (Al-Haleem) and so should we. In simple words, humans are supposed to imitate Allah ﷻ is His behavior towards His creation and the potential to imitate Him has been placed within us. This can only be achieved through a continuous struggle against the opposing tendencies placed within us called Nafs (evil inclinations of our lower soul) usually translated as "soul" (different from upper soul or spirit). In Islam this struggle is called jihad and is a greater form of struggle. This is one of the purposes of creation of Adam (a.s) and his descendants.
At this point it is also important to mention that there are negative attributes that Allah ﷻ has disliked for Himself and in our daily jihad (struggle) we are to dislike them and actively oppose them. Such as in a hadith e qudsi (sacred tradition) we are told by Prophet Muhammad ﷺ that said Allah ﷻ said: “My Mercy prevails over My anger.” It is due to this that the Prophet ﷺ said: “Anger comes from the devil, the devil was created of fire and fire is extinguished only with water; so when one of you becomes angry, he should perform ablution.” Ablution keeps us calm and purifies us physically which is loved by Allah ﷻ as one His beautiful divine name is The Pure, The Holy (Al Quddus.) In another hadith e qudsi we are informed that Allah ﷻ said: “Verily I have made oppression unlawful for Me and for My servants too, so do not commit oppression.” Since He forbade anger and oppression, we are forbidden to imitate such negative characteristics even if it is a little and all this explains for us the purpose of our creation. As per teachings of Islamic spirituality or Tasawwuf the ones who struggle against the negative tendencies and to attain perfection in this manner may reach a status called Al-Insan Al-Kamil , "the person who has reached perfection" i.e. a status attained by Prophet Muhammad ﷺ.
 Al Quran 42:11
 Sahih Muslim 2612 e
 Sahih Muslim 2841
 Al Quran 55:27 – Asad Translation.
 An Arabic-English Lexicon by Edward William Lane - Lane 1863
 Al Quran 38:71-72
 Jami at-Tirmidhi 3543
 Sunan Abi Dawud 4784 – Ablution is called wudu which is done five times a day before each obligatory salah. However it is was encouraged by the Prophet ﷺ even outside salah as it keeps one pure.
 Bulugh al-Maram Book 16, Hadith 1537
 In sufi terminology al-Insaan al-kamil means a perfect human being. The prophets and saints are able to reach it after continuous lifelong struggle against the evil tendencies of nafs (soul).