Reduced ignition timing reduces negative work, not pumping losses. Using more power to push down the piston in the right direction increases efficiency.
Nobody has mentioned cylinder deactivation, this made quite a difference when adapted to the Hemi.

Computer optimization of systems has greatly affected mileage. One example is the automatic transmission with 8 speeds which selects the right gear to go with load to keep the engine in the right area of the efficiency map. This takes a lot of design time, plus the supersmart computer sitting behind the glovebox. Electric power steering eliminates the drag of the PS pump and averages the load caused by the steering assist through the battery. Better bearings in the wheels, along with disk brake systems that retract the pads when not braking, are advances that happened years ago.

What I find impressive is the performance and fuel economy that we get from cars that are physically larger and at least 500lb heavier than those of 1970. Look at the 4500 lb Hellcat vs the 3900lb Challenger R/T. Same for the Z28, the 1970 version at curb weight 3340lb, the 2014 curb weight at 3862. Yet the porky 2014 outperforms the 1970 in every category, same as the Hellcat vs R/T.

Amazing!

R.