I've got tons of free space on my internal 1 TB HDD, only about 40 GB is used. Thanks for the vote of confidence on the card reader. I downloaded & printed my Owner's Manual, but would hate to open this computer up.
No need to open the computer, I think the MS explanation of the problem just said to remove the SD card from the reader.
So download the window ISO in a folder on your C: drive, then open it with file explorer and run the setup from there...
If you want to prepare the USB you can format it with FAT32 and then copy all the files and folders from the mounted ISO to the USB stick.
Just remove the USB stick before you start the setup.exe for the upgrade.