How to Dramatically Reduce System Storage on iPod Touch etc.

I have an old iPod Touch 6 with 16GB capacity, but System Data is taking hostage to 8GB.

I've read that Restoring it (to factory settings) is the way to get rid of it.

But is System Data also backed up when you do an iTunes backup? Will restoring my backup also restore the 8GBs in this System Storage after performing a factory restore? Is there anything else to know/do? And if there's any other way to fix this, please let me know!