There's a few questions in there, so I'll address them one by one.
What does A x B : C Mean?
Read this as A instances of a B number of inputs to C number of outputs. What you are looking for, if I understand correctly, is a 16x2:1 or a 32x2:1 chip. If C is more than 1, then your chip is significantly more complicated - you would no longer be selecting one input and connecting it to the output. Which leads well into the next sub-question -
Why are there $200+ chips for this simple function?
The specific part you linked is a 1x32:16 wide-bandwidth, DC coupled, buffered, video MUX, which can select any of it's 32 video inputs and output them simultaneously on it's 16 buffered outputs, with a gain of 1-2x. You could sorta think of it as a 16x32:1 with a lot of features. It's got quite a bit more inside than just CMOS switches. It isn't really designed for your function, which is...
How do I connect two memories to a master CPU
The most common method for hooking up multiple memory chips to a driver/controller/cpu is to use a tri-state bus. The address lines drive both chips, and the data bus is shared between all chips. Both chips should have a pin like "output enable", which can be controlled by the CPU. I found this article discussing memory buses at a rudimentary level - it has descriptive images. See Figure 8 for the gist of what I think you want. It is the simplest way of hooking things up, and the way I would recommend if the chips support it.
How would I make one?
Well, I think you were on the right track. CPU buses can be bi-directional, so intercepting the right output enable signal may be risky. The part you were probably looking for was a digital switch, something like this 16x2:1 FET mux. This is the cheapest one at $1.75 each. Wide bidirectional buses are best handled by ICs.
I would check with the maker of your CPU to look for app notes and reference designs regarding memory buses. That will be the easiest way to see if you're on track.
To elaborate on W5VO's comment about offering to the gods. +1 by the way.
Sacrificial for protection
In my experience sacrificial component implies that the part will take some kind of damage and get destroyed in order to prevent some more precious part of the circuit from taking damage. Usually, a sacrificial part is designed so that it's easy to replace. One example, would be a common AGU fuse.
Another example. A certain instrument needs to measure an input with an expensive A/D converter. The input arrives via connector, which is exposed to the outside world. Harm can come through the connector (ESD, overvoltage, reverse polarity). A sacrificial OpAmp buffer in a socketed DIP package can be added between the connector and A/D.
On the other hand, that all doesn't make a lot of sense in the context of O.P., in which sacrificial parts are not connected to anything. How would harm come to them? A snippet of your schematic and even a portion of the PCB layout would help understand your context better.
Sacrificial for fabrication
During fabrication* sacrificial mean that something is destroyed in the process of making the product without becoming a part of the product. Sacrificial material is a part of the fabrication process. Simple example: when you want to drill a hole, you might put a piece of wood on the other side of your part, so that the drill bit doesn't over-penetrate into something important.
* of anything, not just electronics.
May be, this is your case. May be, test points are used for some mechanical purpose. EDA package demands that they have to be connected to something (anything), so they are connected to the dummy capacitor.