Architecture: Semantic meaning of the definition of SAVE_ON_FLASH

Is the code stored as strings in JsVars or is that external to JsVars?

It's inside JsVars. It'd be worth using trace(...) to peer inside some datastructures so you get a feel for it?

One string or one per line or ...?

One big string,

Is each statement recursive-descent-parsed each time it is executed?

Yes - there's no bytecode at all. It's slightly quirky, but it works and saves a lot of memory.

What does the compiler produce?

You mean this compiler?

Again, there's some info in there - but proper native code is stored in a String in RAM, and is executed directly from where it sits.