The bank switching uses three of the IO pins, so if you add support for those as I mentioned that fixes both the bank switching and the tape drive (which uses the remaining IO pins).

EDIT: Actually you're right that there's a problem with the bank switching here since it tries to mirror the system RAM/ROM, and it won't be able to as it has only 64K on-chip RAM. You could conceivable get it to work by designating the entire address space as an "IO area" but it'd totally kill performance.