My iPad has storage but won't let me update due to it

You are very likely misinterpreting your available internal storage. You can find details of both used and available/free internal storage here:

Settings > General > iPad Storage

If your internal storage is full, with insufficient space to perform a system software update, you will need to “manage” the storage that you have - and delete unused Apps or unneeded data.  Be aware that to install iPadOS15 via an OTA update, you will need approximately 12GB of free space in which to download and unpack the update in readiness for installation.

These support pages should prove to be helpful:

About storage on your device and in iCloud – Apple Support

What's the difference between device storage and iCloud storage? – Apple Support

Manage your iCloud storage – Apple Support

How to check the storage on your iPhone, iPad and iPod touch – Apple Support

Clear Other storage on your iPhone or iPad - Apple Support

“Offloading” Apps can be a helpful method of creating temporary space for a software update.

https://9to5mac.com/2020/01/21/how-to-offload-apps-in-ios-to-save-space-without-deleting-their-data/

Additional information about creating sufficient space for installation of a software update can be found here:

If you need more space for an update on your iPhone, iPad, or iPod touch - Apple Support

Updating your iPad from a connected PC (with iTunes installed) or a Mac computer (with iTunes or Finder - as appropriate for the installed version of macOS) requires less free space on the iPad - as initial download, unpack and verification is performed by the Computer.

Hi lyro77, thank you for posting in Apple Support Communities.

I wonder if you storage is associated with iCloud and not the iPad mini itself.

Nevertheless, the following Apple linked support article may help you with both checking your storage and how it is used and also provides some options to consider managing to free up more space.

https://support.apple.com/en-au/HT203097

Hope this helps.