A small SS "cache" + HDD does not mean you can't have insta boot up, at least, most of the time.
With a big enough SS partition, say 128-512GB the system can fit 3-5 full games in there (most recently played), the OS and recent apps, and still leave a big portion as runtime scratch-pad memory. With enough storage (and efficient use of it) they can even keep the game state (for insta boot-back) for more than just the last played game, and do that without any power when standby. You can un-plug your ps5 from the wall after turn-off and you still can restart from the exact same save-state as you left off once you turn it back on (impossible on ps4 because it relies on mantaining data on memory by keeping the memory active at a low-power mode)
And there are multiple levels of sophistication at which that could be done too.
For example, as new games are booted up, and older fully cached ones don't fit any more, they could be de-promoted into just partial cache, the main things needed for a quick boot up, giving the game some time to load the rest from HDD to SS as you are playing. With good tagging system, they can make it smart enough so that it prioritises the portions of the game that player is actually in at the moment. In a linear game, that would mean prioritizing current level, and current checkpoint, in an open world, the current area and it's immediate surroundings and only the necessary data for the world state the player finds himself in at the moment. In a game with many modes, that could mean prioritizing the mode that player has been playing at (ex: he's only playing MP now, we can clear SP campaign of the cache and keep fast boot up into the MP or He is only playing Zombie Horde on CoD, if we get to need more space, clear the data of the other MP modes)
If this gets done right, you can very well get a system that effectively has near-insta boot into the software you want 90% of the time, and it still only takes a dozen or so seconds of wait when it doesn't. And that while still having 1TB (or more) of total software storage and not burning $200+ on storage alone.
With a big enough SS partition, say 128-512GB the system can fit 3-5 full games in there (most recently played), the OS and recent apps, and still leave a big portion as runtime scratch-pad memory. With enough storage (and efficient use of it) they can even keep the game state (for insta boot-back) for more than just the last played game, and do that without any power when standby. You can un-plug your ps5 from the wall after turn-off and you still can restart from the exact same save-state as you left off once you turn it back on (impossible on ps4 because it relies on mantaining data on memory by keeping the memory active at a low-power mode)
And there are multiple levels of sophistication at which that could be done too.
For example, as new games are booted up, and older fully cached ones don't fit any more, they could be de-promoted into just partial cache, the main things needed for a quick boot up, giving the game some time to load the rest from HDD to SS as you are playing. With good tagging system, they can make it smart enough so that it prioritises the portions of the game that player is actually in at the moment. In a linear game, that would mean prioritizing current level, and current checkpoint, in an open world, the current area and it's immediate surroundings and only the necessary data for the world state the player finds himself in at the moment. In a game with many modes, that could mean prioritizing the mode that player has been playing at (ex: he's only playing MP now, we can clear SP campaign of the cache and keep fast boot up into the MP or He is only playing Zombie Horde on CoD, if we get to need more space, clear the data of the other MP modes)
If this gets done right, you can very well get a system that effectively has near-insta boot into the software you want 90% of the time, and it still only takes a dozen or so seconds of wait when it doesn't. And that while still having 1TB (or more) of total software storage and not burning $200+ on storage alone.