Normaly all changes you make at runtime to files on your router will be lost after next reboot. They become persistent if you type

flash save

So you write to the flash only by hand and your flash will not be destroyed by frequently writes of the operation system. After reboot data from rom will be overwriten by data from last flash save.

The directories saved are defined in /etc/midge.save. They are saved into partition 4 on the flash behind bootloader (partition 1), kernel (partition 2) and squashfs (partition 3). See also details.

If you increase the size of the kernel or squashfs partition you decrease the size of the flash save partition.

If you write a new firmware with the same partition sizes as the last firmware into your router, the flash partition will not be destroyed and during boot process data from new firmware rom will be overwritten by data from old flash save. This is possibly not what you want. As workaround write another firmware with different partition sizes temporary to your router before you finaly write your own firmware.