That delves heavily into the issue of the actual theology of Chrono, which hasn't been explored very extensively. My take on it is that if Lavos was indeed a true God, two things would be nonexistent: 1) the need to evolve further, and 2) the possibility that anyone could beat him, save for another god of similar stature. However, it's virtually inarguable that Lavos craved power, and had abilities similar to those of the Entity, the only other godlike figure in the series -- and even it was in danger of being destroyed by Lavos. The Entity, though powerful, is a consciousness confined to Earth and the immediate vicinity and as such is apparently not a true God, either. There is a possibility of some type of universal force, but it's unclear how Zen-like in concept such a thing would be.
There are, however, a number of more classical supernatural occurrences in the series that, to all appearances, have nothing to do with Lavos in anything but mechanics. Garai and Cyrus linger after their deaths and are able to physically interact with mortal beings, and several undead enemies such as spirits and ambulatory skeletons lacking accompanying muscular or nervous systems are present. Special relativity dictates that energy with a propagation rate of c, presumably including disembodied spirits, cannot interact in real time with the physical universe. Yet the spirits in Chrono, and almost every other story where ghosts are present, defy special relativity and engage in open dialogue utilizing higher thought processes that require nerves to carry out. The FATE computer, ironically, has some knowledge of the mechanics of souls, as Lynx tells Serge that he put Kid's soul to sleep. It is also stated that Chronopolis has the technology to facilitate the simulation of souls within sentient lifeforms. In order to create a facsimile of such a thing, one would have to know what it contains, indicating that the FATE computer possesses sufficient knowledge and technology to work around special relativity. This is perhaps a consequence of Belthasar's research into time -- he might have found out some vital link between time and the soul. One would think that Lynx is BSing and just pumped her full of sedatives, but she's unable to wake up long after any available sedative should have expired.
The Tesseract, from what we know about it, is not a place that can be accessed in a purely material form. Rather, it is most likely a reservoir of whatever energy lies behind the universe, holding the data for every annihilated timeline. Lavos was banished here in spirit form after he was destroyed, but he apparently has such a mastery of time and of spiritual energies, whatever the hell those actually entail, that he was able to hold on to a form of consciousness and construct his body. Even if it is only data, from what we know about the Tesseract, it can manifest physically given the right conditions. The Tesseract may have something to do with Zurvan, the sea of dreams, as well, but I'm tired and I'm going to take a nap now.
