I wonder how much of this is directly related to age, and how much is just someone's brain becoming "full" due to more memories getting added every year?

It seems that memories must be stored as embeddings with single multi-neuron assemblies (cortical columns?) storing multiple embeddings as a kind of contents-addressable memory that is able to keep memories distinct due to the very high dimensional space (# neurons per assembly) being used. However, you'd expect that at some point if you store too many memories in a single assembly the recall accuracy is going to go down.

You'd expect that with big brains being so costly, evolution has only equipped us with brains big enough to store a lifetime of memories, so it would be odd if memory didn't suffer as we get old.

To make a computer analogy, it's a bit like a hash table getting too full. Say you had a hash table without any overflow mechanism... up to a point recall may still be pretty good, but as the table gets closer to full there will be more hash collisions and likelyhood of "false recall". Obviously the brain is not a computer, but the analogy may hold up reasonably well if you consider the hash table keys and values as embeddings and the store operation being an embedding merge rather than overwrite.