As much as I love Lua its very difficult to shoe-horn into an 8-bit CPU, especially with limited RAM... but there are other efforts to bring more modern languages to these platforms, and one that strikes me as interesting is dflat, from 6502Nerd:
The Pico8-inspired TIC-80 project can use WASM, although it’s a pretty heavy fantasy console too. The WASM-4 project might be another option to look into.
https://github.com/6502Nerd/dflat/wiki
(See language description here: https://github.com/6502Nerd/dflat/wiki/2.-Language-Descripti...)
Maybe something like this could evolve/be adapted for continued modern development needs?