A) what is that internal storage actually? apps & system used space ? all apps execution files only (automatic) install on that space? if yes, then the memory available are totally not enough.
Internal Storage, is the place where you store all things you need, like apps and system. SD card is External Storage, so Internal mean inside your phone. Well, there is an apps where you can move certain of your apps to SD Card.

B) what is the USB storage, something just like the space we can use right? is apps will install on the space too?
USB storage should not able to install in there, USB storage is like pendrive/external hard disc thing.

Correct me, if someone found mistake.

Model of your phone?

Clear your playstore data and cache could help?

Maybe you can backup all your stuff and do a factory reset.