2017 Mac showing only 27.69GB of storage

Welcome to the Apple Support Communities.

You have a split Fusion Drive. Follow these steps to correct it: How to fix a split Fusion Drive - Apple Support.

Performing the steps will erase all data, so make sure you have a backup first!

Jack

It looks like the hard drive is failing. You essentially have three options.

One - Contact Apple Support for service options.

If you go this route, only go to Apple, an Apple Authorized Service Provider, or send your device to Apple for service (if applicable or available). Do not go to a 3rd party/unauthorized repair center or attempt a repair yourself. This is for the assurance of authorized and professional repairs that use genuine Apple parts. Please refer to this from Apple Support:

Beware of counterfeit parts

Some counterfeit and third party power adapters and batteries may not be designed properly and could result in safety issues. To ensure you receive a genuine Apple battery during a battery replacement, we recommend visiting an Apple Store or Apple Authorized Service Provider. If you need a replacement adapter to charge your Apple device, we recommend getting an Apple power adapter.

Also non-genuine replacement displays may have compromised visual quality and may fail to work correctly. Apple-certified screen repairs are performed by trusted experts who use genuine Apple parts.

Two - Another option is to use an external SSD as your startup disk to run macOS and all your data from that. For more info, instructions, and what external SSD to buy, please see: How to Setup and Use an External SSD as your Startup Disk on a Desktop Mac - Apple Community.

Three - Finally, another option is to replace this Mac with a new Apple Silicon Mac: Mac - Apple. If you go this route, it is generally recommended that you purchase 16GB of Memory with the largest SSD that you can afford.

Jack

If you choose option 2, then you would need to follow modified steps due to your particular situation.

Instead of upgrading macOS and downloading the macOS installer, just use Internet Recovery Mode to install macOS on the external SSD. To do this, shut down your Mac, then startup into Internet Recovery Mode (Option-Command-R) by immediately pressing and holding those keys at startup. Then, install macOS: How to reinstall macOS - Apple Support. Choose the external SSD to install to.

Jack

From your screenshots, we could not see that, sorry.

Please take a new screenshot of the "ST1000DM003 Me..." disk and upload it.

Thanks!

Jack

Make sure the "ST1000DM003 Me..." disk is selected, then click "Erase". Make sure the GUID Partition Map is selected.

After the erase completes, take a new screenshot.

Jack