Desktop says out of space, even though I'm on Business trial

It's an external drive. I am getting a clearer picture of the "Drop Box" local folder concept, but it still makes no sense to me.

Why doesn't the desktop app simply mimic or simulate a folder and just store what lives where and info such as file names, sizes, etc. but NOT the actual files, before uploading it to the cloud?

Or more simply, why can't the cloud be the "folder" in the app? That's what I assumed it was doing. 

I already have my photos and artwork organized, so why do I need to do it all over again in a new folder that would take up double the space (nearly 7Tb in all)? Also, the time that it would take to move/copy 7Tbs of data would be days, if not weeks as it has to be moved in chunks. 

Finally, NONE of the instructions clearly spelled out this process or any alternative methods. They simply said that after creating your account, download and install the desktop software, then copy files into it. 

Nowhere do they state that the files would need to be stored locally (again), nor does it explain why. And the error message provides NO clue as to what is happening, only that I needed X more Gbs of space.