So, if my understanding is right, you basically moved the 2 files in the end of the iso, nothing more ?
I think this will not work for big kernel.bin files, because there is still the problem of the size in the RAM !
I had the problem : the kernel.bin is loaded in memory, in a "place" that has a fixed size (approximately 24400 bytes). So, if the kernel.bin is bigger than this space, it will erase some other content of the game, which will crash.
One way to bypass that would be to find where the information about the position and/or size of the place in RAM is located, and try to move it. But I think it is more difficult than moving a file on the disk, because, for example, if there is an empty space in the RAM while you're in a field screen, it doesn't mean this space is not used while playing a FMV, or during a fight.