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It would not have made a difference if it had been a addon. But if the N64 had shipped with a CD-Rom instead of a cartridge slot it would have made a big difference. The N64 would have still had a texture size bottleneck, but the CD format would have allowed for more variety in those textures.

Resident Evil 64 uses a 512mb cartridge. It looks and sounds pretty damn good with all the cutscenes from a two disc Playstation game. That's just an example of what an N64 game can do if it isn't as constrained by data limits.