As someone who is constantly struggling with storage issues on my Apple TVs, the size that one should get totally depends on what the ATV will be used for, or what it might be used for in the future, and basically it comes down to playing games.
Some people will never play any games, and in this case there is very little reason to get the larger 64GB unless you plan on selling it one day.
Some people might play a few game, but don't have an issue deleting old games to make room for new ones, so again, a 64GB might not be needed.
Some people might play a lot of games, or like to keep old games and the data associated with the games on their devices to play later. I highly recommend getting the 64GB version, as it doesn't take many Apple Arcade games installed to fill a 32GB ATV.
I constantly have issues with storage on my 64GB ATV, so 32GB wouldn't even be considered for me.
If space is needed the OS could free up space by deleting some of the Aerial Screensavers, but a few caveats....
The OS will not delete every Aerial, so if someone is in need of space to download a new game but their storage is full, there will be about 1GB of space used up from an Aerial Screensaver.
Even if using a different Screensaver other than Aerials, at least one Aerial will remain on the Apple TV even if you need more storage.
Need proof, I cannot install a 1.2GB game on my 64GB Apple TV 4K due to not enough space, but I still have the Aerial Screensaver:

Another thing about the cached data is how it gets cleared. If an app that is already installed needs additional storage, the OS will free up cached data from other apps and screensavers to provide space for the active app. But, this does not work the same way for installing new apps.
You could have 900MB free space and need to free up a little more for a 1GB game. You could delete many GBs worth of games before the OS will count that space as free space and will only then let you download the 1GB game.
I have even deleted over 10GBs of games just to download the game Inside which is a little over 1GB.
I am unsure how the OS handles the above situation, as there doesn't seem to be a set rule to it, but it seems to be a combination of amount deleted and time before the OS counts the delete apps as free space.
Some people don't realize this, but only about 7 large Apple Arcade games will fill up a 32GB ATV.
Some people will never play any games, and in this case there is very little reason to get the larger 64GB unless you plan on selling it one day.
Some people might play a few game, but don't have an issue deleting old games to make room for new ones, so again, a 64GB might not be needed.
Some people might play a lot of games, or like to keep old games and the data associated with the games on their devices to play later. I highly recommend getting the 64GB version, as it doesn't take many Apple Arcade games installed to fill a 32GB ATV.
I constantly have issues with storage on my 64GB ATV, so 32GB wouldn't even be considered for me.
This is not totally accurate in my experience.Screensavers are considered cache, so if your storage is full then cache will
be emptied. My point is that the screensavers do not take up masses of space to the point that they will cause owners of the 32Gb ATV problems. That’s a nonsense.
If space is needed the OS could free up space by deleting some of the Aerial Screensavers, but a few caveats....
The OS will not delete every Aerial, so if someone is in need of space to download a new game but their storage is full, there will be about 1GB of space used up from an Aerial Screensaver.
Even if using a different Screensaver other than Aerials, at least one Aerial will remain on the Apple TV even if you need more storage.
Need proof, I cannot install a 1.2GB game on my 64GB Apple TV 4K due to not enough space, but I still have the Aerial Screensaver:

Another thing about the cached data is how it gets cleared. If an app that is already installed needs additional storage, the OS will free up cached data from other apps and screensavers to provide space for the active app. But, this does not work the same way for installing new apps.
You could have 900MB free space and need to free up a little more for a 1GB game. You could delete many GBs worth of games before the OS will count that space as free space and will only then let you download the 1GB game.
I have even deleted over 10GBs of games just to download the game Inside which is a little over 1GB.
I am unsure how the OS handles the above situation, as there doesn't seem to be a set rule to it, but it seems to be a combination of amount deleted and time before the OS counts the delete apps as free space.
This isn't a bad idea.My son has started showing interest in playing games on the Apple TV so, I might need more space going forward.
Some people don't realize this, but only about 7 large Apple Arcade games will fill up a 32GB ATV.