What does "sort by name" mean?

When you have files starting with both numbers and letters the numbers come first. If you are using numbers more than 9 you need to use leading zeros, so,

01 02 03... 09 10 11 etc not 1 2 3... 9 10 (though actually Macs will sort corerctly without leading zeros in the Finder but it's not wise to rely on it). Similarly two leading zeros at first if you're going over 99 (001, 002... 099, 100, 101...

Spaces come before letters or numbers - it's not advisable to start a filename with a space, and never with a stop. If files are going to the internet you should avoid spaces (as in your example).

Place in alphabetical (and numerical where appliccable) order of file name. So if we call the photos in the image A, B, C, D left to right, they would be sorted in the order D, A, C, B.