You can be a state of consciousness as easily as your are in New York City.

You are apparently basing your belief on:

http://www.ewtn.com/library/papaldoc/jp2heavn.htm

He does not use the word "consciousness" in this English translation or the equivalent word in the Italian original.

His point was not that hell, or heaven, do not exist but that they are not corporeal realities at this time. A soul sans body does not take up corporeal space but is "somewhere" in a metaphorical sense.

However, a human being is properly comprised of body and soul, at the Second Coming they will be reunited in risen form, and both heaven and hell will accommodate those who have been judged, at which point there will be a "place" of heaven, and a place of hell.

http://www.vatican.va/archive/ENG0015/_P2O.HTM

CCC 1035 The teaching of the Church affirms the existence of hell and its eternity.

So if mercy comes first, and repentance is not necessary, shouldn't no one be in hell, whatever it is?