I want to put two of his quotes side by side to show what I think is a central insight into the nature of the novel.
Experience is never limited, and it is never complete; it is an immense sensibility, a kind of huge spider-web of the finest silken threads suspended in the chamber of consciousness, and catching every air-borne particle in its tissue.
The only reason for the existence of a novel is that it does attempt to represent life.
The second quote gets at what the art of the novel is all about. It is not just a story. A short story tells a story, but it does not represent life. A novel reproduces experience, and what is experience? From James’ first quote, a web of consciousness. And it doesn’t necessarily correlate with length. Some novels are just expanded stories, but a truly great novel represents a web of consciousness through story.