If you ever used a projector, you might have noticed that the further you move away from the screen, the dimmer it gets because light is spread over a bigger surface are.

Observing far places in space, we basically have the same problem. The biggest limitation is that the light reaching our telescopes is very dim and spread out. This is why there's a lot of effort to build larger and larger telescopes... a higher surface area means more light reaching us.

The second big issue is that bright sources of light like our sun makes it much more difficult to observe things that are dim. Also, the atmosphere is blocking certain wavelengths of light. Of course, these issues have already been solved with Hubble and other telescopes that are in space.

The biggest technological limitation is how to build a larger mirror, and how to send it in space. JWST had some clever ideas, like breaking the mirror into multiple segments that would unfold.

Some interesting ideas being explored right now are to use big bodies like the sun as lenses, or having an array of mirrors spread out in space that would focus light to a single point where the sensor would be. If you remember that picture of a black hole we got not long ago, that was done by building a telescope array that builds on that idea, by observing from multiple points on earth at the same time and then building a picture out of that.

Personally, I think JWST's successor will still be a monolith structure, having multiple mirror satellites would get pretty expensive, and the logistics of getting them aligned into position and maintaining that alignment are pretty complex. But it might be sent up in multiple parts that would get assembled in orbit.

Have you ever seen these water balls which absorb a lot of water and become really big? They still feel solid, even though they are full of water. Human body is basically the same.