If not, what is it that governs how much RAM a particular game is able to make use of?
My laptop has 16GB RAM and I have yet to run any game that uses more than 3.7 GB or so. It only seems to have an impact on being able to Alt+Tab back and forth between open windows without crashing a game.
Windows XP can only recognize a little around 2 gigs, if I recall. I don't know how much a 64 bit OS can recognize, but I do not believe its anywhere near 16 gigs.
On multithreading: Yes, multhreading isn't as simple as an option in the .ini. The program must be created with multi threading in mind, as you have to assign threads to certain operations, etc etc.