Texture type -> Advanced -> Mesh type: how it works?

I'm optimizing a 2D platformer game with a paralax scroll, I already optimized the scene, physics and scripts. On the PC it now runs close to 1000FPS, however on my Android phone I have trouble to keep the frame rate near 60FPS.

Because of the paralax scrolling, there's a lot of overdrawing (since I have 7 layers)... Accoring to what I've read so far, the main problem is that the alpha channel that makes parts of the sprite's rectangle transparent have to be rendered anyway, so in my case there is a lot of pixels that are overwriten up to 6 times. What they say is that the best way to avoid this is to replace the sprite with a mesh, that way you can cut away all the alpha stuff and grately reduce overdrawing...

I've also read from people that seem to be doing this on Unity 5 by setting the Texture type to Advanced and then Mesh type to Tight... and supposedly Unity will create a mesh from the sprite for you, but no clear example is given.

I already tried this but nothing seems to happen, if I replace the sprite render with a mesh filter I expect to see the newly created mesh on the "Select Mesh" window, but I just can see the standard mesh filters... so can anyone explain to me how this works???