How does caching improve Sitecore's performance?

Caching significantly improves Sitecore's performance primarily by minimizing requests to the database. When data is cached, frequently accessed items can be quickly retrieved from memory instead of querying the database each time that data is needed. This leads to a substantial reduction in database load, which enhances overall system performance and responsiveness, particularly for applications with high traffic volume.

By serving data from the cache, Sitecore can deliver faster page loads and reduce latency, as accessing data from memory is considerably quicker than performing a database query. This is especially vital in robust Content Management Systems like Sitecore, where performance can directly impact user experience.

The other options address various aspects of system performance, but they do not directly contribute to the performance benefits of caching in the context of Sitecore. For example, caching does not inherently reduce memory usage; it often involves storing more data in memory for quick access. It also doesn't increase file storage capacity, which relates more to the physical storage systems, nor does storing infrequently accessed data improve performance, as caching focuses on optimizing access to frequently used data.