The World of Warcraft folder is huge because the game is huge. Your computer doesn't load the entire game, though.
Even without in-game loading times (except when entering instances and switching continents), your computer loads the scenery in portions when you get within range. That's why, if you fly high up, the ground disappears in a fog. That's called drawing distance. You'll notice that grass and trees disappear before the hills and stuff.
If this drawing distance didn't exist then your computer would have to load and process every single tree, grass straw, player, building and animal in the game, all the time, all at once. You'd find that despite the game being ancient by modern standards, it would turn your Sandy Bridge monster rig into a pile of molten steel and crispy plastic.
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Please "talk up" if your comprehension white-shifts. I will use simple-happy language-words to help you understand.