Shalom and thank you for your excellent question! The name Jacob is pronounced Yaakov in Hebrew, and comes from the Hebrew word ‘Ekev’, meaning heel, because Jacob was born clutching the heel of his twin Esau. (Esau is pronounced Esav in Hebrew and comes from the same root as the word ‘Asui’, meaning done, since he was born with a lot of hair like a more mature person.) Jacob rightfully tried to prevent Esau from leaving the womb first, since commentaries explain that he was supposed to be the firstborn.
Jacob is the third Patriarch, after Abraham and Isaac. The names of the Patriarchs give us a hint as to their spiritual roles and essence.
Abraham is pronounced in Hebrew ‘Avraham’ and comes from the root ‘Eiver’, meaning ‘side’. Abraham lived in an era where idol worship was rampant, but he rejected it and sought out the Creator of the world, understanding that no person or heavenly body such as the sun or the moon or the stars, could have created it. Thus he instituted monotheism, and was idealogically on the ‘other side’ to most of the people of his generation, except for those who he took under his wing, spiritually, influencing them also to believe in the One G-d. There are additional meanings. Isaac is pronounced in Hebrew ‘Yitzchak’ and comes from the root ‘Tzchok’, which means laughter. The matriarch Sarah laughed at the idea of her giving birth at the age of ninety. According to some opinions Sarah did not realize that the angels who informed her that she would have a child in her old age were Divine messengers. She thought that they were regular wanderers since they appeared like that to her. There is another reason however, that Isaac is named for laughter. There are prophecies of the Messianic age, as it is written in Psalm 126:2 “Then shall our mouths be filled with laughter and our tongues with gladness…” The Psalm talks about the Messianic age when the Jewish nation will be able to live peacefully in the Holy Land after all the trials and tribulations of the exile, and serve G-d in the Holy Temple.
The Sages of the Talmud, in tractate Breishit Rabah 47:6, taught that the Patriarchs served G-d devotedly without veering right or left from His Holy Will, just like a chariot which can only do the will of its rider and has no personal agenda of its own.
Jacob was destined to be ‘Israel’ – and according to Chassidic teaching, which discusses the deeper and inner dimensions of the Torah, the name Israel denotes a higher spiritual level than the name Jacob. Why was the name Israel not given to him at birth?
Esau was not only a hunter, but unfortunately he made wrong choices, and instead of using his tremendous potential for good things, he chose to be involved in murder and wanton activites. It was because of his tremendous potential that Isaac initially wished to give him the blessings, but Rebeccah saw prophetically that the blessings were to be bestowed on Jacob. Jacob showed his righteousness by not only studying the ways of G-d in the study hall of Shem and his son Eiver, (the son and grandson of Noah, who taught G-dly wisdom,) but he lived in proximity to the deceiving Laban and not only did not adopt his ways – as a son-in-law might be wont to do, he remained strong in his principles and humble. In Genesis 32:11 it states: “I have become small due to all the acts of kindness and the truth that You have done for Your servant…” And the classic commentator Rashi (Rabbi Shlomo Yitzchaki) explains that Jacob meant that perhaps he had insufficient merits since he may not have acted in accordance with his full spiritual potential. When Jacob was on his way back to Canaan with all his family and possessions, they crossed the river Yabok – Jacob going back and forth across the river transporting family and possessions, but according to Rashi Jacob left some small jars behind and returned for them, when (Genesis 32:25) “He was left alone (on the other side of the river to where his family had crossed) a man wrestled with him until the break of dawn.” Commentaries explain that the man was actually the guardian angel of Esau. After their struggle, in which Jacob prevailed, aside from an injury at his hip joint, G-d named Jacob Israel “for you have fought with (an angel of) G-d and you have prevailed. (Genesis 32:29). The Hebrew term used for ‘you have fought’ is ‘Sarita’, and Israel is derived from that word. Of course this story has deep meaning which is a topic for a separate discussion, but from the fact that Jacob named the site of the struggle ‘Pnuel’ which comes from the words ‘Pnei El’ – G-d’s face, we can see that the whole experience had great spiritual significance. When Jacob left the place he retained the name of it, but it now meant ‘the face that has seen G-d.’
After this turning point, the name Jacob is used when the context refers to Jacobs original status as a Patriarch before the fateful struggle, while the name Israel is used when there is a hint to a higher spiritual level, or to the flow of events leading to the true and complete Messianic Redemption.