KH games have been on Nintendo handhelds before, so there is some precedent.

Spyro Reignited Trilogy is ~70 GB on the PS4 because these days most developers simply don't care. The Switch version had a mandatory download because Activision cheaped out and didn't want to use a 16 GB card, so Spyro on Switch is an 8 GB card with ~7 GB to download. Compression ratios of 4:1 aren't particularly special. The Crash Bandicoot Trilogy (~24 GB on PS4) was comfortably put on an 8 GB card on Switch.

In any case, a 50 GB game on the PS4 can be put on a 16 GB card on Switch without much fuss. 

If you want to play those games, get a real console. 

How on Earth is Switch not a real console? If it can play lots of the same games as the other two?

They recently announced the collection will be coming to Xbox, so I expect we'll see it for Switch as well. Not sure about KH3.

There's usually more to it than just scaling down visuals. If for example there's a battle with 100 enemies at the same time, and the game doesn't run properly even with reduced visuals, what then? Reduce the visuals even further? Dynamic resolution? Remove a number of enemies for the battle? Remove parts of the background? Etc.

Yeah, like you said, these issues do show up all the time during the initial development of the game as well. Which is one reason why porting a game can also be a similar time/resource/money issue, though on a smaller scale. Some of these decisions are not left to the whims of the programmers, but have to be weighed by management. Is it ok for this game to look/play a certain way?

Publishers have to consider a lot of things surrounding even how these games look, that we don't even think about. For example, when Bandai Namco made an arcade version of Tekken Tag 2, which featured some new mechanics, and a new name/title screen, it did not get approved by one of Japan's rating organizations. They said the game needed to look like a new game, for trailers, magazine screenshots, etc. So Katsuhiro Harada had the team adjust the color of the healthbar, from blue to yellow, so it is immediately noticeable that it is different from the original.

Image is also something these developers/publishers consider. But where they draw the line differs from one company to the next. If they've spent a lot of time and money on making a game look/play a certain way, one studio may not think that another version of the game adequately represents that work. While another studio is completely fine with it.

So whether it's worth making a port is up to each individual studio based on their budget and what they value.
Square Enix said a few years ago that they were investigating if Final Fantasy XV would work on Switch, and we haven't heard anything since. I'm sure they could be lazy and make it look like a PS2 game and call it a day. But obviously they don't want that. So would it work at the level of fidelity where they draw the line? And how much would it cost to achieve that? Would it be better to use that budget for the development of a brand new game instead, like Bravely Default 2?

There are a lot of games that seem to make sense on Switch if possible, like Monster Hunter World, or Resident Evil 2. But there are obstacles that some studios probably don't think are worth it, for whatever reason. While another studio may be fine with it.