The default mode of loading extensions is mounted mode, and also using 4096 block size of the squashfs extension images to minimize runtime memory usage. The base system takes up about 32 megs of ram, and mounted extensions take up some but not nearly as much as when the files are copied to ram. Running apps take ram, of course, too. Copying to ram requires a file flag to be invoked anyway.
If older or low resource apps are used, Tinycore will perform quite well on a 64mb ram system, I have used it on one. It is mostly newer apps and not the OS, at least for Linux, that take up so much RAM. Especially web browsers. The modern web is a huge memory hog when a fully compatible browser is used.