Dave,
You are essentially asking for a Knoppix version (adaptation) of debootstrap. I have also asked for that, and I think there is a need for it.
In my experience, the approach to minimalism by substantial package purging is unsafe at any speed. Remove, games, some utilities, LibeOffice, yes - but it is very easy to get a malfunctioning system when proceeding further.
But, how much free space do you need? I would guess you could at least free a few hundred megabytes safely - and I would have kept it at that. Or created a small DVD ISO instead of CD, to avoid that CD size limit.