OK. The following attempts to convey the basic ideas in that same order.
What is sakkāya diṭṭhi? An average human who has not yet heard Buddha’s true teachings (or has not grasped it —akovido) perceives rupa, vedana, sanna, sankhara, vinnana (five aggregates) to be beneficial (and thus have value). Thus, he regards the internal entities as his and external things (that he likes) worth pursuing to acquire. He immerses in that wrong vision (view) with enthusiasm, always thinking and acting with that view, making diṭṭhī anusaya strong. That is sakkāya diṭṭhi.
Before discussing the next verse, I need to point out that sakkāya diṭṭhi is divided into 20 wrong views: Five associated with uccheda diṭṭhi and fifteen associated with sassata diṭṭhi. See, “Sakkāya Diṭṭhi and Tilakkhana” and “Sakkāya Diṭṭhi – Wrong View of “Me” and ‘Mine’”
– OK. Now to the second verse.
In the twenty types of sakkāya diṭṭhi some people have five of those associated with uccheda diṭṭhi. Which five? They believe that life ends at the death of the physical body. Thus they take their physical body and the four mental states to be theirs.
– Others with sassata diṭṭhi believe that one will be reborn after the death of the physical body. But they also believe that there is a “soul-type” entity associated with “me” that can never be ended. For example, Christians believe that their soul with merge with the Creator God and live forever. Hindus believe their atman will merge with Maha Brahma and live forever. They have 15 types of views associated with that. See the two posts above.
– Noble persons have removed all those wrong views associated with uccheda diṭṭhi and sassata diṭṭhi. Having gotten rid of those wrong views, they are on the “bright side” (Idha ariyasāvako sutavā hoti, sabbo sukkapakkho kātabbo) They understand that a “me” is not associated with any of the five aggregates (“rūpaṁ anattato samanupassati, yāva viññāṇaṁ). Here “yāva” means rupa through viññāṇa, i.e., the five aggregates).