Your hosting company should not tell you what it's better for you, it's you who should tell them what you need. You pay for it and they should do to please you. I'm sure my hosting provider would never ever say to me something like they said to you about deleting old post/files.
Suggestions? Yes, tell them to make a backup of your sites content and to set up your server your way (to change the partitions sizes to your needs), and then restore everything. If they will not be nice talk to their manager, if it wont work, change the hosting company.
Really, deleting old post/content is not a best way here.
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