I think that the 1GB RAM on the Pi2 will be very sufficient, so long as the YUMI bootloader is recognized by the BIOS on the Pi. Puppy Linux requires very little RAM to begin with and you make it sound as if more demanding distros run just fine.
I’ll be getting a couple of these soon to play with, just as soon as I find out what to do for a display, as I have no HDMI monitors or TVs at this time.
The older Pi board has an RCA video out. It appears they replaced it on the newer boards.