[Tiktaalik]

Developers filled the CD space with tons of textures and cd quality audio. This pushed the visual and audio fidelity beyond what developers were capable of on the N64.

This is why despite having lower polygon counts, Playstation games often look better than N64 games. The former having a variety of detailed textures, while the latter have one low res texture smeared over everywhere.

[ProfessorLayton]

The texture issue was due to the severely constrained texture cache on the N64, which was limited to 4KB, rather than storage space. Cost was another limiting factor that severely limited storage space. A lot of games released on the N64 were well below the console's maximum game cart limit.

Interestingly the same holds true for the Nintendo Switch: Sakurai mentions how closely he had to work with the development team to compress Smash Bros Ultimate's massive soundtrack. IIRC Smash is on a 16GB game cart despite the console supporting 64GB. Presumably this was done for cost reasons.