Disk space refers to the amount of storage allocated to your website. It is very important to have enough disk space because it directly affects the total size limitations of your website(s). If you plan on continuously updating your website(s) with new content, then you will likely require additional disk space in the future.
Suppose, for example, you have 20GB of disk space allocated to your web hosting plan. The total size of the files and databases that make up your website cannot exceed this amount. If you were to exceed the limit, your website may encounter errors or even cease to operate properly.
The amount of disk space is often displayed on all hosting plan sales pages. Please understand any company offering unlimited storage space isn't truly offering unlimited storage. There will obviously be a limit to the generosity provided by "unlimited storage," whether that be in the types of files that can be uploaded, the use of the storage space, or simply the total amount deemed reasonable. The amount of disk space available on your web server directly affects how much data can be stored at any given time.