The message indicates you don't have enough storage on your flash to do the upgrade. You'll need to copy off/delete any files you do not need. The following is from the Release Notes. Check to see if there is something you can move off.
If the output of the show storage command indicates that insufficient flash memory space is available, you must
free up additional memory. Any controller logs, crash data, or flash backups should be copied to a location off the
controller, then deleted from the controller to free up flash space. You can delete the following files from the controller
to free memory before upgrading:
--Crash Data: Issue the tar crash command to compress crash files to a file named crash.tar. Use the
procedures described in Backing up Critical Data on page 75 to copy the crash.tar file to an external server, then
issue the tar clean crash command to delete the file from the controller.
ArubaOS 6.3.1.3 | Release Notes Upgrade Procedures | 7475 | Upgrade Procedures ArubaOS 6.3.1.3 | Release Notes
--Flash Backups: Use the procedures described in Backing up Critical Data on page 75 to back up the flash
directory to a file named flash.tar.gz, then issue the tar clean flash command to delete the file from the
controller.
--Log files: Issue the tar logs command to compress log files to a file named logs.tar. Use the procedures
described in Backing up Critical Data on page 75 to copy the logs.tar file to an external server, then issue the tar
clean logs command to delete the file from the controller.
Also, what version are you on and upgrading to?