My Classic II has System 7.5.3 but it is horribly slow and it takes up a lot of RAM Space.
But the problem is this: System 7.5 installs a lot of junk into the System/Finder, even if you install it as "For this Mac Only". It will add PowerPC Code into it making it a "FAT" system (a system with both 68K and PPC code in it). You need a FAT or PowerPC/68K stripper program and remove the PowerPC crap from the system (AND Applications too!). This does 2 things:
1) It shrinks the size of the System/Finder saving you RAM and Hard Drive space.
2) The smaller sized system runs much faster on the Mac as it takes less RAM.
3) Because of 2 - things load faster too. So your Boot Time is quicker. Plus you have more room on your hard drive.
Another problem, even when you install as "For This Mac Only", some things still get loaded that are not needed. But you need to be a Resource Edit Expert to get to this point...
Make a back up of the System/Finder and use ResEdit to see what I mean. If you open up certain image, dialog and code resources, you will find things in there for Color Macs and even for the MacTV. Most color images you can remove, as with some dialogs are meant for color macs only. Code resources you need to know what you are removing. Some things are clearly labeled, many are not. If you can figure out what needs to be surgically removed try it on the back up.
If you do a proper job, you can get a bloated System down to a neat trimmed system and then it will run. I did this before with my Mac IIcx/ci's and they run like somebody set their tails on fire! Also on my SE\30. The Systems (and most of the apps) on these machines are tiny - because all of this boated material was removed.