You are right that a vector is a tensor of rank 1 (at least the way physisists look at it), but you say that R^1 is a tensor and that is incorrect. I'm pretty sure i know what a tensor is, I have taking courses in, opeartor analysis, real and complex analysis, measure theory, tensor analysis, Riemannian geometry and Lie groups, if you look in the math section, you will see that one of the people helping me on this subject would be me.
I have also taking general relativity so I also know how physisist look at a tensor (as an multiarray of numbers).
My problem is that you, say that the vector space is a tensor, this is wrong. It is right that R^1 contains on ranktensors. From R^1 we can then construct a space, by taking the tensor product of the two spaces (note between the spaces not elements of it), that is
R^1 \otimes R^1 = R^1
the reason that these two are isomophic, are that given a basis for R^1, let's say e_1, then a basis for R^1 \otimes R^1 is all elements of the form e_i \otimes e_j, but there is only one, namely e_1 \otimes e_1, so it is easy to write an isomophism between the two spaces. And this is not surprising, because this is the space of 1x1 matrices, which is of cause the same as R^1.
If you want to make n x m matrices over R, you need
R^n \otimes R^m = R^{nm}, which again has the basis e_i \otimes e_j \ , \ i=1,...,n \ and \ j=1,...,m, you can look at e_i \otimes e_j to referering to the ij number in the matrix.
You can just now say we make some continuous limit, and then we got functions, and if you do you have to be carefull, and anyway it is not done at all like you do it. The problem is that you wan't to make the tensor product between spaces that is not finite dimensional (uncountable in fact), which is not always so simple.
But in fact I don't think that is what you want, i just think you wan't to take tensor products between functions. So if we have a function space H, with a finite basis, f_1,...,f_n, you can do the same to take the tensor product of H with it self. Then an element in that new vector space is
g_{ij} f_i \otimes f_j einstein summation assumed
writing it in the basis as most physisists do, you would only look at g_{ij}. Now if you wan't to take a non discrete basis (or more precise a non descrete set that spans the sapce), you could write the same thing i guess (not even sure it works, but i guess physisists hope it do)
g_{xy} f_x \otimes f_y
now einstein summation must be an integral to make sense of it. but one have to very carefull, with something like this. The reason that this works, i guess is something to so with the spectral theorem for unbounded operators, and maybe physisists just hope it works because it would be nice.
It seems to me, that you haven't used tensor products between spaces, and just used them between elements not really knowing what's going on, on the higher mathematical plane, and maybe this have led to some confusion, I'm not questioning that you can do calculations, in a specific problem correct, but I'm telling you that many of the indentities you wrote here, is either wrong or you are using completely nonstandard notation.
Ps. It was not to be ruth, but I know a little bit of what I'm talking about, and would very much like to see some references, on how you use it, because that would help a lot, trying to understand how you are doing it, but am I completely wrong if this is notation you have come up with yourself, or do you have some papers or a book that use that notation and tell it like you do?