The Jewish People are not the sole believers in Hashem. Nevertheless, says Rav Wolbe (Da'as Shlomo Shavuos pg. 496), there is a marked difference between the belief of the other nations and our emunah in Hashem. In Tehillim (113, 4) we read, "Exalted above all the nations is Hashem, in the Heavens is His glory." The nations all know that there is a G-d, but they perceive that due to His exalted stature He has made His abode in the Heavens, with little or no involvement in the day to day activities down here on earth.
In contrast, Bnei Yisroel believe that Hashem is much closer to home. The Torah tells us, "He discovered them in the desert; in desolation - in a shrieking wilderness. He encircled them; He granted them discernment; He protected them like the pupil of His eye" (Devarim 32, 10). Bnei Yisroel are encircled by Hashem. As the Rambam writes, "Our Sages said anyone who has tefillin on his head and arm, tzitzis on his garment and a mezuzah on his doorpost is guaranteed not to sin, for he has many reminders - i.e. the angels that protect him from sinning as it says, 'An angel of Hashem encamps around him and saves him.'" Moreover, Bnei Yisroel are not only encircled with angels, they are encircled by Hashem Himself - "Hashem surrounds His nation" (Tehillim 125, 2). Just as we are surrounded by air, we are surrounded by Hashem's glory.
As Rashi explains, Hashem's encirclement of Bnei Yisroel manifested itself in numerous forms. He enclosed them in the clouds of glory, He encircled them with flags on all four sides, and He surrounded them with Mt. Sinai when He held it over their heads like a barrel (forcing them to accept the Torah). Let us take a closer look at each of the occurrences mentioned by Rashi, two of which are described in Medrashim on this week's parsha.
The Tanchuma (Bamidbar) tells us that there were seven clouds of glory. Six clouds surrounded them, one on top, one underneath and four more: one on each side. The seventh cloud traveled in front of them; killing snakes and scorpions and leveling mountains and valleys. Bnei Yisroel were encircled as if in a cocoon; all their needs were cared for to the point that clouds ensured that even their clothes did not wear out.
The Medrash (Raba Bamidbar) tells us that when Hashem revealed Himself by Matan Torah, He was accompanied by 220 thousand angels, all carrying flags. When Bnei Yisroel observed this phenomenon, they too desired such flags, and Hashem acquiesced as we read in this week's parsha. The flags displayed the uniqueness of each facet of Bnei Yisroel in the eyes of Hashem. These flags were so precious to Bnei Yisroel, that when the nations tempted them with positions of great honor, they retorted, that anything that they can offer pales in comparison to the flags that they received from Hashem.
The third occurrence mentioned by Rashi is Matan Torah. Chazal tell us (Brachos 17a) that the world to come contains no food or drink. Rather the righteous sit with crowns on their heads and bask in the radiance of the Shechina, as it says (by Matan Torah), "They perceived Hashem and they ate and drank" they were satiated (from the Shechina) as if they ate and drank. If an example of the world to come can been seen from Matan Torah, we can deduce that by Matan Torah, Hashem gave Bnei Yisroel a taste of Olam Habah. This taste of the world to come can be felt every time we learn Torah, about which we say, "And eternal life he planted within us."
Bnei Yisroel don't merely believe in a G-d Who "sits up in Heaven." We believe that Hashem is very involved in every aspect of our lives. We are literally encircled with His glory. He protects us, He cares about each individual, and He gives us the ability to live an other-worldly life right here in this world!