Shalom and thank you for your question! According to Kabbala, when we wake up in morning, a ‘ruach ra’ah,’ ‘evil spirit’ (not a ghost but a negative spiritual condition,) rests on us, and thus needs to be removed by washing ‘neigel vasser,’ from a special large cup prepared by the bed, into a bowl. The washing should preferably be done by the bed, but if this is not possible, within 4 cubits of the bed, as you point out. The water that was used receives the impurity and should be poured out in the bathroom.
The Talmud states that sleep is a sixtieth of death. To understand this, we need to look at the makeup of our souls. There are five levels of the soul, Nefesh, Ruach, Neshama, Chaya, and Yechida. According to Kabbalistic teaching, the higher levels of the soul leave the body in our sleep, while the lower levels, which enable physical life and functioning, remain connected to the body. Since there is a certain element of death here, it causes impurity, as those things that involve the opposite of life are considered impure. This important principle is why we wash ‘neigel vasser’ before leaving the bed and embarking on our day.
What are those higher levels doing while they have temporarily departed our sleeping bodies? They are connecting with G-d, unfettered by the limitations of body and physical function, or of time and space, in order to return rejuvenated to our bodies.
The state of sleep resembles the condition of exile, because in both cases, our potential is not being revealed. It is known today that many people use only a small percentage of their mental capacity, for example. It is worthwhile making an effort to expand our spiritual consciousness for
when Moshiach arrives, G-d-willing speedily in our days. Then, we will no longer be living and functioning in a spiritual sleep-mode, but rather all our powers and capacities will be revealed… May it be very soon!