Everything in the universe is defined at some level by a measure of space. Even those things that appear as solid are actually made up of minute combinations of particles called molecules, which are made up of even smaller particles of atoms that consist of even smaller particles of protons, electrons, etc. Think about it. It penetrates and surrounds everything, but it is described as no-thing. We say it is so small it has no center, so big there is no edge.
Space is where qi dwells.
I want to point out that I prefer to use the word expanding as a description instead of stretching. To stretch does mean to extend out to a greater length. However, when told to stretch, very few people are also expanding. This creates a problem in that students usually stretch by reaching in a single direction. With everything going the same way, there is no opening effect, so that stretching usually leads into rigidity.