I'm frequently amazed by what can be built within the limits of PICO-8 and Lua.
On the other hand, I haven't seen any computational model. It seems the "machine language" actually is Lua, and processing power is not limited by the specs, but by the host computer. Thus, there are quite a few ways we could trade speed for size.
My dream of a fantasy console is one that we could actually instantiate in actual hardware, should we want to. Ideally a cheap FPGA for which we have a Free toolchain, like the iCE40.
Also the Playdate which is ARM based and will have an SDK supporting C and Lua: https://play.date/
Then of course there’s tonnes of older hardware that’s well emulated and well understood. I’d recommend the GBA as giving all the flavour but having a reasonable amount of headroom.