Incremental updates don't generally take up additional space once they are installed. Yes, you do need to have free space to download and install them. But if your storage is so full already that you're having trouble updating, you have to much stuff on your phone and this can lead to other problems such as decreased performance and data corruption.
You might want to look at these articles:
How to check the storage on your iPhone and iPad - Apple Support
Manage your photo and video storage - Apple Support
Most updates involve additional security so you should always download them. Major updates such as the next version of iOS (probably will be called iOS 17), you can wait on until you see how it's working for other people.