It is rare these days that the processor would get bogged down by processing code, but I suppose, if there's way too much to process, it's possible.
In my experience, a more likely scenario, still, is that the GPU is the culprit -- various shaders and rendering methods that have been intentionally obsoleted (in newer version of DirectX) to be precise, putting more work on both the GPU and the CPU. If, by such way, rendering is forced onto the CPU (something that in games they call "software rendering"), what you get is exactly what you're experiencing: the game becomes practically unplayable until everything loads into memory.
The GPU is meant to lighten this load on the processor, as CPUs are not nearly as efficient at handling resource-heavy 3D
and running all the code/software at the same time.
Once everything is loaded into active memory (provided that you have enough memory to store it), gameplay returns to normal until new objects and resources need to be loaded (at which point you will experience some lag again).
The speed of the RAM memory cards themselves can also cause a (smaller) performance hit -- if the GPU is throttled by their speed.
Edit:
To put the technical notes aside, essentially what I'm saying is that maybe the processor is not bogged down because there is too much code/script to process, but because it is preoccupied with what it shouldn't have to be taking care of (aspects of 3D rendering).