I have a masters in mechanical engineering and have been around both RC cars and real race cars all my life, so I know what I'm talking about.

Incorrect. Race cars have lightened fly wheels, sometimes no flywheel, just the mass of the clutch/torque converter to improve the responsiveness of the throttle, both going up the RPM band and down. Going up, to improve acceleration of the car and increase the speed of downshifts. Going down the RPM band to make upshifts faster. Most street cars with a manual shifter are limited on the speed of gear changes, not by operator skill, but by waiting for the RPMs to rise or fall to the right speed so you don't run your clutch. Most race engines operate in the upper 1/3rd of the rpm range so low speed lumpyness is not an issue that comes with light or no flywheel.

Higher intertia of the rotating parts will only decrease the ability of the drivetrain to react to changes in speed. This is bad.

A ratio that is used in real cars is 4 lbs of rotating mass is worth 1 lb of static mass.

The rotational interia of the parts also matters. Two parts that weight the same can have difference charateristics under rotational acceleration. More mass toward the center of rotation is better. (look up polar moment of interia) (somebody else already pointed this out on this thread)

Since most competition oriented rc cars are under or at weight with good rc gear, concentrate on reducing the rotating mass and unsprung mass of the car. Add static weight to the chassis at the center of the car to bring it up to mass. Lighter diff balls, prop shafts, turned pinions and spur gears, drilled diff plates (check out niftech's stuff), all are good ideas to reduce rotating mass. Composite/graphite arms and hubs are good for unsprung mass.