The new Jerusalem will not occupy what we now know as Planet Earth. It will be a physical place, since our physical bodies will be raised. But just as we will be new and different from what we were before death and world's end, so will be our dwelling place. That is why we are warned not to desire overmuch the things of this world, since they will be forever lost to us. For where your treasure is, there will your heart be also.
Scripture is full of references to anointing with oil.
Kings and priests in the Old Testament had scented olive oil poured out over their heads. The Good Samaritan in Jesus' parable poured oil and wine on the injured man's wounds. James speaks of anointing the sick. In the Eastern Orthodox churches, this is done instead of confirmation and immediately precedes first communion. In addition, oil is used during many rites of blessing.