- Can someone clarify what the RAM holds vs the SD card?
The TFT RAM holds the current screen image plus some sprites (small images that can be moved around on the screen). Since at those resolutions a single screen image would take up more RAM than the Arduino has and much of the FLASH memory it is good to have an SD card for mass storage if you want to have more than one image.
What limitations occur if the SD card is not used (not inserted)?
Your storage space will be very limited.