OK --- Now I DO understand. This is definitely a case where they don't manage or adapt their own storage well, nor make it easy for you to manage.
Here's one way to better manage space within OneNote, at least with 2016 version:
--Each "Notebook" has it's own storage, and is chosen to be "available" (cached) or not. This means that you can limit your computer to only the notebooks that you want available offline. Then, only put things you know you will want offline in that Notebook. I'm assuming that you can also access OneNote on another PC, and manage all the Notebooks there. If not, use the Web Version of OneNote, as I explain below.
If you want to access files or data that is not in one of your cached Notebooks, then use the free Web Browser UI, with works fairly well to just read, and not create new content. You can also use the O-365 version for Android or iPhone, which is also free to access these Notebooks. (Check with the phone versions how they treat storage, or you might have to just use the browser's option, and not their apps.
Limiting and trimming files and photos is definitely going to save space. If copy and pasting from a web page for instance, each picture will generally be saved in the page. This can add up quickly. I personally trim out as much as the useless files, text and formatting from within the editing page.
Versioning and control is a major feature within OneNote, so you can always go back quite far and track what you did months, or even years ago. This is another reason for the large size. You can trim these back, especially in very large "Pages", by simply copying the old page with the history, and then deleting the original "Page". Be careful though, since they will have IDENTICAL names, and the content will also look identical--one with history and one without.
1I doubt it's possible but would be interested to know of a solution if anyone has one. I think it wants to cache your entire notebook for performance reasons. Out of interest, how many gigabytes is the folder? – Mr Ethernet – 2019-08-07T15:01:56.607
1I am using Outlook 2016 (edited to reflect that above). I love when people take the time to tell you that a problem you are having isn't actually a problem. The notebook is 11gb, 10% of my drive. Also planning to make heavy use of the voice memo option, which will quickly double and triple the file size. This is a big issue. With nearly zero network latency and using a laptop designed to take advantage of that fact, it is local storage that becomes the premium. I am able to use the app on my iPad without having to have the entire 11gbs copied locally. A logical request for a cloud storage app. – codingCat – 2019-08-07T17:14:55.373
codingCat, http://onenote-blog.com/the-onenote-cache-and-offline-notes/ explains the design of OneNote (all versions) is to locally cache first, then (using a proprietary protocol, MS-FSSHTTP AKA Cobalt), write from cache to cloud. – K7AAY – 2019-08-07T17:42:09.917
I understand, and it makes sense to store it locally until you have verified that the info has be successfully stored to the cloud. The point I disagree with is then copying everything created on other devices back down from the cloud, and then creating multiple copies of it locally. – codingCat – 2019-08-07T17:44:58.373