I'm running openwrt on a tplink ER605v2, I think it has 256mb ram & 256mb flash, also has a usb port, can it handle sqm cake for a 80/30 or 100/50 connection with adguard home & unbound "recursive" all at once?
AGH and 256MB RAM could be an issue - Adguard Home configuration
I've an old pi 2 model b, I could run it or pihole & unbound on, & connect it to the router using ethernet, does this have any draws back, compared to running adguard home directly on the router?
That's a better idea, than putting it on the re605.
The ER605v2 is basically a clone of the ER-X I used to use as a gateway router. That should be just enough for 100 ISP service if you are willing to tune things up, compromise a bit and do not have pppoe ISP service (which needs more CPU).
The MT7621 CPU in your ER605v2 has four threads (but just two cores). I suggest installing and enabling irqbalance and also turn on packet steering and software offload (even though SW off load is not compatible with SQM, I think it helped a little bit back when I was using the ER-X and in any case it did not hurt).
Perhaps you can get by with adblock instead of AGH? Also, CAKE is a single thread application, whereas fq_codel/simple can use multiple threads. The MT7621 will just handle 100 Mbps CAKE, but it can handle closer to 200 Mbps with fq_codel/simple (or free up some CPU compared to CAKE with only 100 Mbps ISP service).
Don't expect too much if you throw anything else at your ER605v2 like a Wireguard client (though unlike OpenVPN, at least Wireguard can use multiple threads). OpenVPN is not something I would even be thinking about.