Physical as a visible spirit/vision or actually just alive though? Hmm…
In the trailer, where Rey is standing on a stone surface with Palpatine in the left side of the frame, he looks like he is attached to some kind of moving chair. If he was a spirit/vision he wouldn’t have to be physically attached to anything, that seems to imply that his body is weak but real. And in the last few frames of the shot his fingers are visible, and they look normal (if that means anything).