One first comment , some of us call the general trend here
creeping featurism. When you do this you start adding features
that are only that. They add no critical function nor make it
lower in power consumed or directly improves the usefulness.
AN external TOY cock chip run on back up battery.
That would solve the problem.
Stuffing a nano, first is just another atmega328 and also its board to
add, bad choice when space and power are critical. That serial to
USB part is not a power aid.
The fix for lack of flash and ram then would be a bigger MPU
say the Atmega2650 (serious SMT). The 64 pin TQFP or
100ball BGA should more than stop a few from repairs or
plug in upgrades.
Most of the 400P/R encodered are far to high resolution for the task
and even using interrupts strain the 328 if other tasks are needed.
That requires a different structure in the firmware to keep it all working
and likely more space too. Also with 400p/r the tunign rates have to
be tweaked to suit the fact that before it was slower with fewer P/R
But hey we can keep adding to it until the basic function is totally lost.
Please reply on list so we can share.
No private email, it goes to a bit bucket due address harvesting