There isn't enough free space on your iPhone to update the iOS. What are the TWO things that you should do?

You need enough room on your iPhone for the iOS update. Since files can be temporarily stored on the computer by the update while it is working, you might be able to perform the update on it. You must clear up space on your iPhone by deleting any unnecessary apps or data if it still won't update via your computer. It is not possible to add internal storage to an iPhone, and while an SD card and an adapter can be used to add additional storage, the iOS cannot be stored on an SD card.