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Nine Inch Nails – Right Where It Belongs Lyrics 11 years ago
This has been my absolute favorite song for years... I've seen the meaning slightly differently through different times in my life but some key meanings have stayed the same

I believe the "animal in the cage" refers to the parts of yourself that you keep locked up and under tight control... the animal inside of you. (anything you perceive as a negative aspect of yourself - for Reznor this was likely addiction, could also be mental illness, strong emotions, dreams/urges that have been dismissed because they aren't socially acceptable or you've convinced yourself they're impossible... anything like that)
When he asks if you know which side you're on he could be saying that when you lock this part of yourself away - supposedly to keep you safe from it - you might have really have put yourself in a cage, confining yourself. if you look this part of yourself in the eye too closely you might realize the truth
You're life is safe and you're doing everything you're expected to do, everything is how it's "supposed to be" but you feel empty inside. And how could you not when you've limited yourself like this - when you've put yourself in a cage by caging the animal inside of you?

The next part could be an existential question, asking exactly what it says - if its possible you have created this world within your consciousness and none of it truly exists in a physical sense, in which case he's saying that you should take a close look at yourself and wonder if this is really all you can imagine yourself being. if this is a dream and this life is your creation are you happy with the life you created and how you portrayed yourself? if you could see what was really underneath this image of yourself and see who you really are deep down would you want to? (or possibly if you could see past the cracks in this "reality" you created would you really want to know the truth?)
If you really want to live in this illusion (whether meant literally or metaphorically) you can, but you can't see the big picture (the woods) when you're hiding in the details of the present (trees). you won't see the meaning of everything when you're focused on the trivial aspects... (or possibly you won't truly understand reality until you've stepped outside of it)

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