I have written about this before. This is true. Many FFTs null-fill a lot of RAM and certainly never write to it. I once heard a joke that VMS would log when a user sneezed. VAXen were designed in the days of slow, poor performing hardware.
Memory management is one area in which it excelled.
Yes it worked. Of course there was a lot of help from some of the hardware. The tty boards had seperate CPUs that handled all the escape-sequences, etc. The CPU was never called upon to write pages of Screen memory a'la Xwin. So, that would be half an answer anyway.