A couple of things you need to understand. First, Android can't use every byte of space. For any OS to function, you have to have enough of a buffer for it to perform temporary file read/write operations. With Android (depending on installed ram and version) that limit is usually between 200MB~300MB and when you reach that threshold you get the low storage warning, plus you probably won't be able to install any new apps or save large files, if the default is set to phone storage.
Files you can easily move are things like photos and media (music and video). It looks like, however, that most of your storage is apps, which means one of two things. One, you can delete some apps that you aren't using, or two, root your phone and install apps2sd. The first is only a temporary solution. You'll always be hitting your limit and having to deal with this. The second, we'll it's got its problems, too. First, I don't trust SD cards enough to run apps on them and frankly, they were never intended to do that. They have a tendency to fail at the most inconvenient times. Apps2sd also can't move just any app, it has to be compatible and the biggest storage users like Facebook, Instagram or Whatsapp can't be moved. Finally, even those apps you can move don't move completely so you don't regain much space with any app you move.
What I find more troubling is that you report only 1.12 GB total device memory and 1.4 GB of storage. That's almost nothing these days. What phone is this? And what version of Android does it run? (menu>settings>about phone)
Now, why it's like that ... we have to go back to the early days of android when phones have very little memory and no storage. But, they all had an SD card slot, so if you wanted to expand it's capabilities you just put in an SD card. You must understand that Android is based on Linux and because of that, certain file system conventions are similar. In this case we are talking about mount points. That's where the OS knows where files are located. We start with root which is represented as "/". from there you begin your folder/directory structure. For app developers to take advantage of sd card storage there had to be a common standardized mount point, otherwise a developer would either have to account for all phones, models and configurations (which probably wouldn't be possible) or ask the user to set the location at installation which defeats the purpose of easy interchangeable apps and services. So it was determined that the SD card would mount at "/sdcard".
This is where ALL apps look for storage space. Fast forward a year or two and phones with 4GB, 8GB and even 16GB of internal memory started showing up in the stores. Android needed space for the system and for apps, so the rest was used for storage, which Android expected to be an SD card. So, manufacturers mounted the internal storage at "/sdcard" which worked just fine. If those phones also had a slot for an external SD card, then it got mounted someplace else. And, because not all phones have an SD card slot, there was no standard set, so it could be anything. It's usually something like "/sdcard/external" but you'll see enough variations so that all it can be used for is file/media storage. Not an elegant solution, but it worked for most people.
Still, it caused problems as apps and games required more and more. Today you'll see phones with 32GB and 64GB of internal memory, and those that have SD card slots can support perhaps an additional 256BG of storage. With all this memory there had to be some advancement in how it's used. Newer versions of Android (6.x and later) off you a choice of how you want to use it when you insert an SD card. You can select /file/media storage only, which means pretty much that. If you have a huge music library, download videos and take tons of pictures, this is ideal. The second option is adoptable storage. What this does is use your SD card as an extension of the internal memory. The card is encrypted and tied to the phone so that you can't remove it without reformatting it and losing everything stored on it. With file storage only, you can pop the card in and out without consequence.
I suspect you have an older phone with limited resources. If you intend on keeping it a while longer, I think your best bet is to move all your media files to the sd card (and please, back them up off the phone, too -- I do not completely trust SD cards) and delete those apps you aren't using. That will buy you some time, but the real answer is ... (sorry) get a new phone.