@icedquinn @xianc78 Those 8-16 bit consoles are different. Sprites and textures are also different concepts. 2D sprites use pixels. Textures use texels. 2D sprites normally use indexed color palettes (could also be 24-bit color bitmaps, it depends). 3D textures might use 24-32 bit color (depending on wether it's RGB or RGBA or the likes of, the order might change). Sprites might be rendered in 3D space, but that's a "trick" pulled out by the console. i.e: willboards do this.
Normally sprites and 3D objects are rendered in separated layers. Specially in the Saturn, since both 2D and 3D functionalities are separated. However, at least on the Saturn, textures are stored at the same place the sprites are, and handled by the VDP.
Sprites are also handled differently from textures since they are not meant to be drawn in 3D space. You can notice in games like Tomb Raider how sprites rendered in 3D space always 'look' at the camera, and all the hardware does is some trickery with the scaling to make it look like it's further or closer from the camera (plus the Z-buffer to determine the order of the elements being drawn).
Bit blitting is a thing used when drawing sprites with certain effects such as transparency or when copying portions of another bitmap into another. Normally you would use a mask (often called "transparent color") for the transparent parts and then blit the image using an OR for the mask and an AND for the sprite, which is faster than just copying bytes. Most game consoles handled this for you through hardware.