The "No MicroSD card, ever." restriction seems awfully arbitrary? If you think it could be an option some time in the future, feel free to fill up your internal storage.
I would generally advise against digital downloads of larger titles if you don't have access to expanded storage, though.
Some notes:
There are some physical games that still need a significant amount of storage space on the Switch. Some publishers like to skimp on cartridge costs, and you can end up with several extra GB to download and keep on your internal memory. Without expanded storage, this can eat up your remaining space fast.
Outside that, there's still patches and other updates and stuff, and all that needs space too. Some games have pretty large save games, too.
You can "Archive" stuff on your Switch. It'll delete the game, but keep the save files and menu icon, ready to download again.
I wouldn't expect a next Fire Emblem until 2021 at the earliest.
All in all, if you think Three Houses is going to be your only (large) digital title, go ahead.
Otherwise, yeah, go physical.