Given the many different views suggested, it may be time to see if other places in the Bible give insight on this matter of 'image'. This will actually answer what 'image' means in Genesis 2 by a process of "working backwards".
The New Testament speaks of one who is called "the last Adam" and "the second man". This is Jesus Christ. It also speaks of Christ as being the image of God, so the New Testament is the point from which we can work backwards by considering what it says about Christ and 'image'. Consider:
"And so it is written, The first man Adam was made a living soul; the
last Adam a quickening spirit. Howbeit, that was not first which is
spiritual, but that which is natural; and afterward that which is
spiritual. The first man is of the earth, earthy: the second man is
the Lord from heaven." (1 Corinthians 15:45-47)
In agreement with a point made in one answer (that Genesis 2 verse 28 needs to be included with the previous two), here is a quote from a book explaining how this all relates to 'image':
"The main emphasis in Genesis 1:26-28 lies in the concept of 'image
and likeness', together with that of 'dominion'.
It has been indicated that what the Elohim passage discloses of the
divine image and likeness - eternal, almighty, inscrutable - is that
of light; life; spirit; and it may be, love. But - as to that image -
whatever may have been true of Adam in innocence, of necessity this
was but the palest reflection of the brightness of God's glory
manifest in Christ in the fulness of time.
That two men, one of earthy creation, the other of eternal purpose,
were determined in the counsels of God before the creation of the
world, and manifest - one in substance, the other in shadow - from the
foundation of it, is evident. Hence the conclusion of the apostle
Paul, 'As we have borne the image of the earthy, we shall also bear
the image of the heavenly'. 1 Cor. 15:49.
But the earthy was earthy by definition before the Fall. And if
the pale reflection of the image and likeness of Elohim was borne in
an earthen vessel, what of that? As to the divine image and likeness
in the heavenly, this is another thing. Being heavenly, he is the
Son. Then, he is the image of his Father. But that is very, very far
from - it transcends beyond measure - the image and likeness of Elohim
in Adam.
This image of the Father in Christ, revealed in the gospel of God
concerning his Son, is glimpsed in the promise of that gospel from the
foundation of the world. Now, however, the Son is risen, and 'God, who
commanded the light to shine out of darkness, hath shined in our
hearts, to give the light of the knowledge of the glory of God in the
face of Jesus Christ', 2 Cor. 4:6 Creation, pp 74-75, John Metcalfe, 2008"
This means that if we want to grasp anything about the image of God in the first Adam, we have but to look to the last Adam - Christ Jesus - the very Son of God. Whatever we see of God in Jesus walking this Earth, we can know with confidence that the first Adam was initially like (until he sinned, and that image was marred).
The text that shows this is the best way to grasp understanding is to consider what Paul said about those who do not understand:
"But if our gospel be hid, it is hid to them that are lost: in whom
the god of this world hath blinded the minds of them which believe
not, lest the light of the glorious gospel of Christ, who is the image
of God, should shine unto them" 2 Cor. 4:3,4
The first Adam was a vessel of clay but the last Adam "is the image of the invisible God" Col. 1:15. What is seen in Christ is that divine image - and we can see it once we are no longer blind to the gospel of Christ! That is why the book of Hebrews says that this Son is "the brightness of his [God's] glory, and the express image of his person" (Heb. 1:3). It then quotes Psalm 8:4-8 about man having dominion over the earthly creation, and applies it to Christ, the last Adam. Hebrews 2:6-8 continues by saying we do not yet see all things put under him, "but we see Jesus, who was made a little lower than the angels for the suffering of death, crowned with glory and honour" Heb. 2:8-9.
So, just look to the glorified last Adam, full of light, life, spirit and love, to know what the image of God is. Tragically, that likeness in the first Adam was marred by sin so that darkness, death, fleshliness and hatred became predominantly obvious. The last Adam had to come to restore all of that so that there will come a time when all things are subjected to Christ in a re-creation.
EDIT: The answer to the main question is that the biblical meaning of glory, as in the phrase "the image and glory of God" is (in Greek) δόξα (Strongs G1391); opinion, judgment or view; splendor, brightness, magnificence, excellence, dignity, majesty."
However, God is Spirit, the incarnate Son of God told us (John 4:24), which is why we are to worship him in spirit and in truth. There should be no attempt to bring down to the human level the glory of God. Humans must aspire upwards to see the spiritual glory of God. The second matter raised by the OP's friend, "that our sexual nature actually gives physical expression to some attribute of God" strikes me as an example of the former, while the book I quoted from gives an example of the latter - spiritual application, as opposed to carnal application.
I obtained a book that delves into this. I recommend studying The Image of God, Personhood and the Embryo by Calum MacKellar, SCM, 2017