Anything is possible if you add a peripheral interface, as you're suggesting. The question I would raise is whether such a gadget would have any practical value, as there isn't existing software that would take advantage of the device. Also, you run into the same problem Sega did themselves, in that nobody wants to support a peripheral over an unadorned console because it limits your possible customer base. If you want more colors, best to develop a game for the Saturn. Better still, get an XNA or PSN development kit and make a game that comes on one of many virtual distribution channels so you don't have to worry about writing a cart ROM or minting a disk.
