God is Holy
God asks us to be Holy as He (God) is Holy.
Holiness means 'set apart'.
The Holiness God speaks of is not a list of external rules, in and of itself.
Godly Holiness is a Desire. A desire deep within our hearts. Its a deep desire to have our heart set apart for God. To live for Him. To deny the things not of Him. But, not a rigid system of rules to accomplish living only for Him.
If we position ourselves to desire Him, chase after Him and spend time getting to know Him through reading His Word and sitting in His Presence, then our actions will automatically day by day start to line up with Him and His ways.
Does that mean keep doing sinful things on purpose even though we know they are wrong? Of course not. We must try our best to not do things we know are wrong. And, if we slip and fall, or plunge, into things we know are wrong, then we just get back up, apoligise to God and try try again, until our relationship with God changes are hearts not to be inclined to continue in wrong activity.
Also, Holiness, or being set apart from God, does not mean never having contact with non-Christians. Godly Holiness means loving our non-Christian neighbors and living for God so much that our lived out values and changed natures will draw them to God.
Separating or thinking we Christians are better than non-Christians does not honor God. We are not to be 'holier than thou' towards them or condemn them. We are to love God with all our hearts, live Gods way in perfect humility and love them as He does, and that will bring Glory to our Father in Heaven.
Holiness is an inside job. To sum it up, it starts with us desiring to fully desire God, submiting to Him, Seeking Him through His Word and His Presence, letting Him change our blackened heart, and then letting our miracuously changed actions naturally supernaturally follow.