Memory and storage specification

We should have a section of the specification that describes the following:
- [ ] storage layout for each type
- [ ] how memory works with regard to function calls
- are reference types copied when passed to a function?
- when is memory allocated and freed?
- how are reference type returned from functions?
- [ ] clearly describe when something will be put in storage
- [ ] clearly describe when something will be put in memory

Start by locating the specification documents and any existing sections describing types, storage, memory, or function calls. Document the storage layout and each listed memory and reference-type rule; the work is done when every checklist item is addressed clearly in the specification.

Written by the indexing model from the issue text.