XMC1100 has a cortex M0 core. It will always start from Flash. If you would run the code in the RAM, you need to move the code into RAM and jump to it. Remember to remap the vector map.
Do you have an external storage device on your board. If not your code size is limited by the ROM size.
Yes, I understand all this. But what are the specific changes I need to make to the linker file and startup file to implement this?
Split your program into two parts: a bootloader and an application. [...] The bootloader will load your application code from flash into RAM , remap the vector table, then jump to it.
I do not know how to do this in DAVE, but in IAR (for example) you just need to specify the prefix __ramfunc for the target function.