Why did Apple create a 64 bit processor without increasing RAM?

Forgive me if I'm completely misunderstanding this; I'm trying to grasp the concept of 32 and 64 bit processors. If I'm correct, the difference between the two is that a 64 bit can process considerably more amounts of system memory, both faster and more efficiently than 32 bit processors. If this is so, why didn't Apple increase their ram to more than just a gigabyte? I know we currently don't really need this much power in a smartphone yet, but doesn't this render the fact that Apple made the iPhone's chip 64 bit practically useless?

While 64-bit addressing can allow more RAM to be handled, it's not the only reason to do so in a chip, no.

You didn't mention the specific processors, but I'm assuming you mean the Apple A7 design, which in turn is based on the ARMv8-A? Then you'd want to look at the AArch64 features to see what it offers.