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If WinUAE truly requires 128Mb RAM then this is a major flaw, nothing else I run needs such colossal amounts of memory...
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No, it does not require 128Mb (if you don't set Amiga memory size to over 64Mb...), but because Windows internally requires at least 32Mb of memory to work properly. This leaves only about 30Mb (if you have 64Mb system) for WinUAE. Running WinUAE takes about 10Mb memory = you have only about max 20Mb for emulated Amiga's memory + JIT caches...
But this doesn't explain why JIT doesn't work on your system. It should work if you have enough swap space. Did you try my suggestions?