I personally like the cart idea. Yet probably to simpifly things I would make them tiny and just put a flash chip on them. The only thing is we would need to have a easy way to update or reflash the chip on the cart with out loosing space to make a arduino app that simply just writes or app/game to the flash chip (loosing out on space that that would be needed by the app it self to flash the chip). I don’t see much of a point in putting a separate cpu on the cart unless there is plans to be able to change it to a much higher end chip (like an arm M0 or M3).
Something I always liked about the pokemon mini system were it’s little cartridges.