Mac Mini 9.1 (2020) Storage

I am having to operate my M1 Mac mini from primarily external HDD's. By the time everything was up and rolling after the changeover, I found that I was 'out of space' alerts on the 250SSD. My problem is that I believed Apple advertising, which has turned out to be a bit disingenuous regarding memory and space. So...what is the absolute minimum number and types of files required on the internal SSD. I am aware that System files and the main Library file are required (Why are there so many Libraries?) Also why can't I delete files from Time Machine ? I'd I am able to do that, how do I do it?

Thanks,

Grace Prof