Hi Tim (@coder8),
Unity certainly doesn’t like lots of GameObjects - at least not in the Editor. I find the general rule is:
Runtime API for anything bigger than a small-to-medium level, Editor Extension for smaller, crafted levels.
I’ve been using maps of 5x5x100 with the Runtime API on my phone (Android - Samsung Galaxy S) and it runs beautifully, but the same wouldn’t apply within the Editor.
A GameObject-per-tile (the way Tidy TileMapper does it) is for a very specific set of functionality (to support game logic and painting functional objects).
For something closer to an old-styled Zelda game (where the tiles are 99% non-functional) - if you wish to paint in-editor, I’d recommend looking at something that creates a mesh at edit-time as you paint (as this will go around the in-Editor limitations of having many objects in the scene).
Alternatively, if you’re going full 2D, jet me an email - the “Add Background” functionality in the newest release (going out this evening) can be used to paint procedural meshes, zero gameobjects but for the Mesh object.
Maybe even jet me an email or message either way - I’ve got a few 66% completed extensions for TTM that you might find helpful.
Edit: Actually I’m too excited by one of them to keep it a secret.
I put together an extension to the Streaming Maps plugin (since I couldn’t think of a nice way to release it without it just being… some script you drop onto an object) that takes an image (say, from paint or photoshop) and associates every color you use with a Block.
That way, you can paint a massive massive map (a billion by a billion), load it into TTM, tell it “Hey, Blue equals Water” and when you press ‘Play’, it makes a Streaming Map based on this. No need to mess around in the editor.
If that’s something you would find useful, or anybody would - hit me up. It’s finished, but I don’t like to muddy the waters too much with features that distract 
-JFFM