Lighting is certainly a big factor (I'm not sure when limelight first came in). For royalty and nobility, sets could be surprisingly large and extravagant, but not for normal theatre.

Was mime really a response to censorship? I'd be interested in knowing more about that.

I suspect puppetry may have had other origins. I'd think it has more to do with ways of presenting a story with minimum weight. Puppets, especially shadow puppets, are lightweight and one operator can control more than one shadow puppet. Also, you can get more grotesque with puppets - you can get a much better dragon than with an actor.