I am recommending it because that is the only way it’s supported, that I know of. Sure you might be able to get it to work but ESX is designed to be installed on hardware not as a VM. Pretty sure if you try it this way it will work.
How did you create the VSM was it built form an ISO or imported from a ova? I don't understand your comment about assigning 3.5 GB to the ESX host. Can you print out your .vmx file for this VSM and attach it to the post.