I was wondering, what is forcing you to keep a somewhat larger inventory for early on? I figured there could be craftable inventory solutions immediately upon starting a new world. Like baskets made of plant materials for storage and a sort of primitive backpack made of plant material too (I don’t remember what it’s called, but it’s conical in shape and has like braided fibers for the strap you can sling over your shoulder. As for building material being the main space-taker, I consider that part of the challenge with scarce carrying space. I figure if the player needs shelter, they would have to rely on natural formations like caves so early on until they can gather sufficient building materials. That would give a very ‘stone age’ feel.
Though, I understand this can be too much of a hassle for some players. I really liked your idea of increasing complexity with materials (like easy mode treats iron and gold as the same ‘metal’ material and very difficult treats every material as it’s own thing). Perhaps the same system can be used concerning inventory? Easy makes space very abundant and difficult treats it much more believably?