If we all go through the circle of animals, how do ghosts and spirits work?

Ghosts are spirits.

Those that are attached to the things of the earth (including attachments to living things) are called ghosts because they remain here, on the earth.

Those who are not attached, cross over to the afterlife. The afterlife is the conscious universe.

To understand ghosts and spirits you need to understand yourself.

You look in a mirror and see your flesh face staring back at you.

If you look into a full length mirror, you will see your clothed flesh body is also there.

But you are not your body. You are a spirit inside a body.

The body is not you and you are not the body.

The body is an instrument that you, as a spirit, utilize in order to gather the information of your physical existence.

All of the information in your mind is your information. It is what you think you look like, what you think you sound like, what you think of, what you know, what you remember, what you believe, what you dream about and what you fantasize over. All your information is who you are.

You are not your body.

All information lives in the conscious universe. which is one dimensional.

The physical universe is multi-dimensional.

The physical universe is made up of many conscious dimensions.

Sight, sound, taste smell, feelings, emotions, logic and reasoning, the imagination and the psychic dimensions.

This is what makes the physical world 3-D. The conscious dimensions are all compressed to produce the matter impression of conscious information.

But the physical world itself is unstable, it is not eternal. It is finite and so it breaks down. The only thing that endures, is the information itself. And you are part of this information.

When your body dies, you are released to the conscious universe that is one dimensional, but you come with all your 3D information in the form of all your memories. Now you can continue to think and imagine and live in your mental world with 3D recordings that will make you feel like you are still alive in a body.

You will also be able to continue to communicate with people on earth and with other spirits right there in the afterlife.

Animals do not have the complex thinking of humans. They live simply for the smell of the earth, which is why their noses are almost always busy smelling what is on the ground or in the air.

They enjoy the simple pleasures of life like lying in the sun or chasing butterflies, or taking a mud bath.

They do not live spirit lives because they love the sensual pleasures of the earth so much though a few who are devoted to their human owners do visit them.
It is a shame when you think of how much enjoyment the animals get from natures simple pleasures and yet how easily man destroys not only their habitats but also the animals themselves, right to extinction.

To the spirit echelon, (the higher realm of spirits) man is the lowest on the creation scale.