It's our first day. We just have a tent, so I guess our only option is to sell everything to make room in our inventory? What about wood, fish and butterflies? I want to donate them to the museum eventually. If I just drop materials on the ground like in my tent will they stay there permanently or disappear?
Talk to nook and see if he mentions upgrading your tent to a house (This might be a day 2 thing), its "free" but you'll be in debt with him (no rush to pay it off). Once you do that you can unlock nook miles + to earn more miles, which will let you buy another row of inventory from the machine in his tent. Pocket organizer I think its called.
I know in and around your tent you can "Place" fish/bugs that you want to donate, they'll remain there until you pick them back up. After you show Tom 5 bugs/fish, You'll want to save 15 unique fish/bugs/fossils (fossils need a shovel you can't get until blather's arrives) to show blathers the next day so he'll build the museum. Otherwise you can sell any duplicates, or some fruit/resources you don't need if you need cash. Save up any iron & wood because you'll need that soon.