In my opinion his claim was in regards to memory. If you lose sleep you can’t get that memory correctly “written” to your long term storage. And once you miss the timeframe when that memory was relevant you can’t recover it by simply sleeping more. So in effect, your short term memory suffers irrecoverable damage if you skip on sleep. Cognitive function does require adequate sleep and recovers to normal operation.
It handles files of any size because file copy is a binary stream. It’s the best way to preserve integrity. Crypto is from OpenSSH which ships with Nodejs.