Verse 2 is a kind of specific purpose statement for all of the nation of Israel then and for the Israel of God today (Galatians 6:16). God thunders that His people shall be holy—different and separate from the world around them—because God Himself is holy. The people are to reflect the God they worship. When others see the people of God, they are to see an image of God Himself in how they treat one another. In this way, God's people represent Him to the world. So Jesus teaches His disciples, "You are the salt of the earth. . . . You are the light of the world. A city that is set on a hill cannot be hidden. . . Let your light so shine before men, that they may see your good works and glorify your Father in heaven" (Matthew 5:13-14, 16).
Then, in verse 3, God gives the first and most important of the physical instructions in how to treat others. It begins with one's parents, for they are the neighbors that children come into contact with first and most often. Children see their parents in the same way that we come to understand what God is to us, and we learn to love God by loving them. So our first lessons in loving our neighbors happen within what should be the friendly confines of the family.
Interestingly, the duty of showing reverential love to one's parents is connected to the proper observance of the Sabbath. This indicates a link between the fifth and fourth commandments. We show love to our neighbor, first of all, by revering our parents, and we show love to God, first of all, by keeping His Sabbaths. They are foundational starting points for proper interactions within those two most important relationships.