“He is making me think that the distinction between living and nonliving matter is not sharp,”

Uhh - that is the basis for materialism. 'We are just particles' - essentially, ergo, we cannot be 'alive'. It's funny that Scientists have to figure this out, when it's the fundamental underlying presumption in their branch of metaphysics ... and frankly why we may very well be able to further refine/understand evolution in material terms, we cannot - by definition - explain 'life' in terms of materialist thinking ... because by definition it is excluded from existence. In materialism, we can really only have 'the appearance of life' or intelligence etc.. Materially, we are just a 'bunch of random noise'. Which is obviously an unfulfilling idea, but one which nevertheless rests at the root of science as we understand it today.