Macbook Air Storage on HD

Hi,

I just reset my MacBook Air to factory settings. It is saying that I don't have enough storage space to upgrade software. When I look at 'About this Mac', it says I have only used 9GB out of 121GB available but only have 5GB free space..

When I search the storage, the system has taken up 10GB and there is 6GB in iCloud but the rest are all in MBs.

Is there some sort of partitioning going on? Any help appreciated.