The idea would still hold true for 32-bit app. on 64-bit OS.
Each application has it's own address space, and RAM is not partitioned on a 'per process' basis...
But yeah, if you hit the architecture's max. address space usage limit, then an app. obviously can't use any more than that, no matter how much left over you have.

That switch only works for 'large address aware' programs. Not all 32-bit progs can use it. You would have to consult technical manuals/docs to see if a specific program supports large addresses.
64-bit OS doesn't use that switch, it doesn't need it. If the 32-bit program is 'large adress aware' then the LAA switch is already working under 64-bit OS. It was an extension of OS hosted address space from 32-bit to 36-bit.
I suppose that is a benefit of 64-bit OS right there; but it won't do anything (either the switch or 64-bit OS) if the address space of the application isn't configured to use it.

I also found that the 'imposed limit' of Vista 64-bit address space is 8,096 GB. Guess I was off a little with the 16GB figure...
Oh, well, it's still an imposed limitation.

Friends don't let friends use booleans.