1) since it takes a couple of seconds for a HD to spin up, could a person load the OS into flashrom to boot up off of, is it big enough, could you put a second flashrom on there for this?
Not really practical... only put the drivers and Kickstart related stuff in the flashrom. These devices have a limited life and you don't want to waste it tinkering with your startup sequence. Once they burn out they would be difficult to replace. And the more FLASH the more expensive the accellerator.
1a) Could I boot off of a Compact Flash card? The 25 speed ones?
With USB, some built in drivers (in FLASH) and an external card reader you could do that.
You need the drivers for USB and common USB devices in ROM so they don't have to be loaded.
Since the device is easily replaced if it gets worn out that is a much smarter option than using the flash on the accellerator board. Speed is only limited by USB transfer speeds. If you have support for High Speed USB 2.0 it will be more than fast enough.
BTW, RAM size is limited by the OS but I can't remember what the limit is... something about the exec using some bits for a special purpose limits actual size below the limit of the CPU. There is also a limit to how much RAM the controller on the Coldfire supports.