How do I increase storage on iPhone SE 1st generation

You cannot increase the storage of an iPhone.

• However, you can optimize iPhone Storage by using iCloud Storage in order to save space on your device
• If you had turned on Messages in iCloud & iCloud Photos and you delete Photos, Videos and Messages from the iPhone then it is deleted from iCloud too, and vice-versa. At the same time, it is also deleted from all the devices that use the same Apple ID.
• And if you happen to take a backup either over iTunes or iCloud after deleting Photos, Videos & Messages all the photos and messages are deleted from the backup (iCloud/iTunes) too when you take the backup next time.
• Alternatively, you may upload data to iCloud Drive.

Settings > [your name] > iCloud Tap Photos > Choose Optimize [device] Storage --> Set up and use iCloud Photos - Apple Support

You may buy iCloud Storage. --> Buy more iCloud storage - Apple Support

Before you buy more iCloud storage see if you can manage your existing storage --> Manage your photo and video storage - Apple Support

Your photos are always available for both iPhone and iCloud. You delete it on the iPhone it is gone from iCloud and vice-versa.

To save space on your iPhone use optimized iPhone storage. Remember, if you delete in one it is deleted everywhere.

Get started with iCloud Photos:

1. Tap Settings > [your name] > iCloud > Photos.
2. Turn on iCloud Photos.
3. Select Optimize iPhone Storage to save space on your device.
4. 

With Optimize Storage, smaller, space-saving photos and videos are kept on your device while all of your original, full-resolution versions are stored in iCloud. And as long as you have enough space in iCloud, you can store as many photos and videos as you want.

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

The Apple Video below may help you understand better.

Srvanka beat me to it by seconds!