The Warehouse - the difference between storage and memory

Every now and then I provide computer advice to friends and family. Eventually the subject of their computer's performance comes up whereby I state that the most cost effective improvement to a computer's speed is more memory. This inevitably leads to a disambiguation between memory and storage space. So for the record, here is the difference;

Memory is the working area of your computer and the hard drive is the storage area. The best analogy I can provide is a warehouse. 

In a warehouse you have floor space and shelf space. When you need to access a package you take it off the shelf, put it down on the floor, open the box and work with the item. When complete you put the item back on the shelf. A computer's hard drive and memory are analogous. The hard drive is the shelving and the memory is the floor space. There is a noticeable amount time between telling a program to run and that program being available to work with. Like shelf space, a hard drive is optimized for storage and not working with files. The process to retrieve and return items to a shelf is much more time consuming than moving them around on the floor. Memory is designed to be very fast and as such is relatively expensive compared to the space space on a hard drive. So similar to a warehouse there is much more shelf space compared to floor space.
The reason I say that adding more memory to a computer will make it faster is similar to the warehouse floorspace. As you take items off the shelf the floor becomes crowded. Eventually you can't take anything else off the shelf without putting something back because the floor is full. A computer has this problem as well. Eventually you can't run anymore programs because the memory becomes full. Computers, much like in a warehouse get around this problem by putting programs back onto the shelf in a special area called swap space. As I mentioned, the shelf space is much slower so as you switch between applications the computer starts to react much slower as it has to put an item on the shelf and take the requested item off.
By adding more memory or floor space to a computer you have more room to work and the computer will spend less time swapping (1) items back to the shelf or hard drive.
A as corollary, if you run out of space to store your application or files such as a glut of digital photos or home movies you need more shelf space and have to get a bigger hard drive. Typically though people run out of memory before they run out of storage space. This is largely due to the fact that each successive version of an application tends to get bigger requiring more memory or floor space when upgrading and users tend to run more programs simultaneously the longer they use their computer forgetting to shut down unused programs or getting more comfortable with multi-tasking.
(1) Computer scientists and geeks will no doubt want to correct the difference between traditional swapping and paging but that clearly doesn't matter for the sake of this article.