It the moment, VC / Wiiware still needs to be installed on the nand. The real nand flash chip is only 512MB in size.
The most recent cIOS allow to use an emulated nand. It's basically the contents of the nand flash on the usb drive.
Another approach is using neek2o. That simply ignores the internal flash disk, and does everything from an emulated nand on the harddisk or the sd card.
You can use multiple nands with it, and it minimises the risk to brick your wii, since you install your VC and Wiiware on your virtual nand, which are just a bunch of folders on the harddisk. You can install wad's on your nand with a program like multi mod manager or wadmanager_gui. (Just 2 examples)
Be aware that installing a malformed wad can cause a bannerbrick on your system menu. Make sure you have priiloader on it to recover from such occasions.