Putting an active, dynamic Wordpress blog inside an iFrame is a very good idea

Not sure what kind of limits you've heard that are in Filezilla?
It works very well, and it is smart enough to only transfer files that have changed or are new, which makes it pretty fast to update a full site when only a few pages have changed.
... I need to deal with this and perhaps splitting the site is the ultimate solution.
With a dynamic site that grows every day you can just as well start splitting right away! The sooner the better...