So what do you do within those parameters? You try to make a game that relies on #2 to subsidize #1. The alternatives? Release totally free games (where's the business model?). Release ad-supported games (everyone hates ads!). Release games on a flat subscription model. Or accept that the whales are your actual paying customer base, and make games explicitly for them.
By and large, the mobile gaming industry has concluded that the latter approach is the optimal way to run a profitable business. The result is the shitty, manipulative, cookie-cutter approach to game design that has become so dominant today. But unless and until some of the 99% of us decide that games are worth paying for upfront, this seems to be the world we're stuck in.
Do people hate ad-supported games more than they hate games that nag you to spend money on them constantly?
There are examples of games that got the freemium model right and are fairly successful as a result, and the pattern is always the same: start with a game with a fun core gameplay loop, do not gate gameplay content or progression behind paywalls, let players spend money on cosmetic/status symbols, or to more quickly progress in areas that could also be progressed more slowly without spending.
Warframe and Path of Exile do this and are seeing a good amount of success as a result.
And this trust is actually far easier to earn if I am making larger purchases, not smaller ones. I'll spend $100 on something if I think it's a high-quality, one-time payment. But I won't even spend $1 on some seedy, risky experiment.