Inertia (I) is equal to Mass (m) times Radius of Gyration Squared (k2).
The units of Inertia are therefore kg.m2 (not per m2).
Obviously the mass is important as reducing the mass using an aluminium flywheel reduces the Inertia. I have assumed that the mass is lower and the purchase of the aluminium flywheel is not solely to do with "bragging rights" or as us uncooth Australians call it "wank factor".
The major component of the right side of the equasion is the Radius of Gyration. This is defined as the radius of an infinitaly thin disc that could replace the complete flywheel. If all the mass of a solid flywheel were able to be concentrated into this infinately thin disc than the radius would be 0.7 of the outside radius of the complete solid disc. 0.7 squared is down to 0.49 , less than a half. The 'k' is therefore the dominent factor of the equasion.
Inertia is defined as the opposition to Acceleration. It is the force that stops / reduces something from changing its velocity either upwards or downwards.
The real trick is therefore not reducing the mass of the flywheel but in fact reducing the radius of gyration. This is the reason for the ever decreasing size of clutches and therefore the increase in the number of plates (friction surface area must remain the same or even increase) that are common place in race cars today.
I agree with Ross and others above that you must be careful with road ability and we have done a lot of work to get that balance correct. There is nothing more frustrating than stalling a car at a set of traffic lights because the flywheel is "too light".
As a little foot note, this is a little more complicated than I have explained, all the rotating assemblies (harmonic balancer, crank, pistons and rods and the clutch assembly ) must be considered.
The advantages of slipping through the revs quickly and therefore accelerating the engine and therefore the car quickly are great but stalling - yuk!!!!!!
Best wishes,
Robert