Storage size is the amount of hard disk space that your hosting company offers for your web pages. All files which comprise your web page (documents, graphics, animations and others) must fit into this space.
To determine how much storage you need for your website, look at how much it takes up on your local disk. The easiest way to do it is to right-click in the Windows Explorer on the folder where your sites is located, and choose Properties. Your web page will take similar amount of storage on the server as it takes on your hard disk.
You should keep in mind that you may want to add some files to your web page in the future. Therefore you should give yourself some storage margin when signing up for hosting service, so that new content and files will fit on the server as well. A good rule is to buy at least 50% more storage than your website initially has.