Sounds normal to me. N64 games are pretty huge. And if you've modded your system, with the extra cIOSs installed, that takes up about half of the normally available storage space.
You can use the Wii Menu's Data management tool to move the channels from system memory to the SD card. This will remove them from the Wii Menu, but not affect your data save state.
Then when you want to play it, click the SD card in the lower-left corner of the Wii Menu to load the SD Channel Menu. You'll find your games there and can launch them from here.
NOTE: Games launched here will be copied to a temp-memory for faster read access. If you quit and run the game again, this will still be in temp-memory and will launch fast. If you launch a different channel from SD card, what's in temp-memory will be overwritten with the new channel, so when you go back to the first SD channel, it will have to be copied all over again. This is normal.
Because of this, you will still have to keep about 250 blocks free in system memory to keep enough room to temp-copy the N64 games. But you only have to have one game at a time this way.
I have about 40 WiiWare and VC games stored on my SD card for this purpose.