I would say a little of both. Some of the most important bottlenecks a new game dev will encounter is "number of colors, screen resolution, sound properties" etc.

The CPU speed is also limited but it's a different kind of challenge to try to make a game be so complicated that there's enough math to even do to challenge the available CPU allocation given how few permutations of screen space are available to try to alter.

Depending on your game, RAM limitation and program space limitation might also come into play.

But the artificial limitations are only one element to why the platform is popular, the other element is the tooling.

Much like using Unity, Unreal, Roblox, etc you have loads of primitives and coding features (and music and SFX creation suites) at your fingertips built right into the platform, and how the limitations help here is to cap how subtle and complicated a person's goals are liable to be in order to help refocus the developer's attention back onto the gameplay loop.