My idea is centered around getting apps to work by providing an environment that is identical to the Macintosh Toolbox. In the eyes of the app it looks and smells like a Mac because the API doesn't change, only it's implementation. An app doesn't care what's under the hood of the OS, as long as the API behaves the same and returns the same result despite being on different hardware.
I'm of the opinion (and feel free to correct me if I'm wrong) is in order to change things in MacOS 9.2.2 to support more memory, improve date time limitations, hardware support; It would require modification to MacOS ROM, System, Finder, Extensions and other binaries that make up the OS. Not only that, it would be up to the developer to build an implementation of respective fix.
This is why I went down a path of sandboxing on Linux. Linux is open source, it has a substantial amount of hardware support and many critical system components are implemented. You can install Linux on PowerPC hardware. The kernel can be compiled to be low footprint.
In light of that thinking, I thought it might be plausible that a sandbox could reimplement the Macintosh Toolbox to target system components in Linux (X Window, PulseAudio, networking, etc). I understand there would be an overhead because Macintosh Toolbox would require thunking/translating API calls to Linux and back again - however given hardware has improved over the journey the speed might outweigh the overhead.
The gain would be to run MacOS 9 classic apps on many facets of hardware, having graphic/audio/input/network support across the board.
Rethinking this strategy, the biggest hang up I have is how Extensions/Control Panels hook into MacOS, how that might affect the ability to change the behavior of a sandboxed MacOS at runtime.
Food for thought.