More likely you've hit a 1.3->3.1 compatibility issue. A huge proportion of 1.3-era software (mostly games, especially demos) isn't system friendly, so when addresses and other things change with new OS versions, the software breaks.
See if there's a WHDLoad install for it, otherwise get yourself a Kickstart switcher to swap easily between 1.3 and 3.1.
EDIT: Or, if I had read your post properly, I would have said "I'm not sure about the RAM requirements of 3.1, but I believe it to be more memory efficient..." :-)
