Paul isn't saying every single Jew is personally holy. So what kind of 'holiness' is he talking about, and why does it matter so much for the future?
It's crucial to understand that the 'holiness' Paul speaks of here is primarily covenantal and corporate, not necessarily individual personal piety. The entire nation of Israel, by virtue of God's covenant with Abraham, was set apart and consecrated to Him.
This doesn't mean every individual was sinless or perfectly obedient. History shows plenty of disobedience among the Israelites. However, their national identity was marked by this special relationship with God. The 'firstfruits' and the 'root' being holy signifies this divine election and dedication of the nation as a whole.
Paul uses this concept to argue that because the nation was initially set apart and consecrated by God through their ancestors, their future restoration and salvation are not out of character for God's plan. Their corporate identity, rooted in God's promise, assures their eventual return.