Just as a self follow-up, another motivation to lean on tool use rather than massive context (cf. short-term memory) is to keep LLM/AI written/modified code understandable to humans ...

At least part of the reason that humans use hierarchical decomposition and divide-and-conquor is presumably because of our own limited short term memory, since hierarchical organization (modules, classes, methods, etc) allows us to work on a problem at different levels of abstraction while only needing to hold that level of the hierarchy in memory.

Imagine what code might look like if written by something with no context limit - just a flat hierarchy of functions, perhaps, at least until it perhaps eventually learned, or was told, the other reasons for hierarchical and modular design/decomposition to assist in debugging and future enhancement, etc!