Along with metaphors and analogies, a 'strange loop' seems essential to human intelligence.
We invented language without any understanding of the neural machinery underlying it. Yet think of what happened to transportation in the wake of understanding Newton's physics (from carts to trains, planes, and space shuttles), or to communication in the wake of our nineteenth century understanding of electricity and magnetism (from letters to our satellite-based telephone network), or to medicine once the circulation of the blood and the role of microscopic organisms were appreciated (from purging to physiologically-based neurosurgery for Parkinsonism). Once we establish a nearly-correct explanation for our thinking and language machinery, we should see a great augmentation in our capabilities as the principles become incorporated into our educational philosophy and into the ergonomic design of our machinery. "Rationality" will take on a whole new meaning, and musical composition will flourish as more people become capable of Bach-like mental agility.
If self-consciousness is a form of self-reference, does that mean self-consciousness changes us? Maybe. But to different degrees in quantity and quality. If we understand (and thus change) ourselves reasonably, we may achieve what we could not do before. However, if our understanding of ourselves is too sudden and too radical, we may fail to function properly afterwards (at least it would take much time to adapt to the new self).
Occasionally, ignorance is bliss. (I am a happy person for this reason.)