I think Switch carts use a form of flash memory, which precludes this sort of extra-flexible expansion. You could include a chip on the cart, but it wouldn't have much throughput to do things like real-time graphics transformation. As for compression, most consoles just do regular decompression with the open source image libraries in the system BIOS, or on-GPU texture decompression. It wouldn't surprise me if the sprites in a game like River City Girls, for instance, were just PNGs.
The Switch is "just" an Nvidia Shield, albeit not running android. The carts are your standard mask ROM on a (proprietary) bus manufactured by Macronix and so would not be able to extend the functionality in a meaningful way.
Texture decompression is handled using the hardware acceleration on the Tegra if being used to save VRAM, otherwise using standard libraries (like libpng, libjpeg, etc.) in the game software.
