Regarding Internal Storage Management in Android devices

Hello.I'm Viswanath,a Computer Science student and an Androidpit.com fan from India.Rather than explaining the exact doubt i'm having i'll say it with a real time example which i have faced,so that it would to east to get to you and clear my doubt.
I currently use Motorola Moto e and it's internal storage(usable) is 2.21 gb.I have noticed that it has left with 1.8 gb storage with pre- installed apps and android 4.4.4 os.That's good till now.I have installed all of the apps that i need personally and after installing all finally the storage is 600 mb.(I don't even store a 1 mb file of my own,i use to save all my stuff under sd card).i use internal memory only for apps.so,till now i have updated nearly 30 apps(google apps and other third party apps).and i immediately update any kind of app whenever it has an update in play store.likely i keep all of my apps up-to-date.even after clearing the app cache and total cache data i have left with 300 mb after all these updates.So,whenever i update an app it is increasing my internal storage.So,i have got a doubt.while updating an app will that app extend the storage with it's previous app data??.Why the new app update is extending the data rather than getting replaced with that previous app data.If this happen like this i need to Reset my phone for every 3 months as it is having not that great Internal Storage.and probably one day my Internal Memory would go to 0 mb if i keep going on updating all of my apps.Is it a mistake to keep up-to-date all of my apps?Because as i said the app memory is increasing with each update one day our memory would probably go to 0 mb if i keep on updating like this.So,please help me regarding my doubt and also how the Internal Storage allocation is managed in Android?