Sometimes my inventory gets full and I don't want some of the things because I have found better things I want instead. How can I drop or otherwise dispose of those things to get things I do want?
You can select an item and move it outside of the inventory area and then release the item.
You can select an item, move it to the trash can, and then simply delete it. I know on the controller if you select an item with A, and then hit B, it auto teleports the cursor to the trash can. The delete key will also immediately trash a selected item.
Note that the former might get impacted by your wearing a ring that has a larger item attraction distance. It's conceivable you could re-pickup something.
You can also drop fish (and other items from your inventory) back into the water where you caught them if your inventory is full. Instead of dragging the fish to the trash to throw it away, release it over the water besides the trash/around your inventory. Not sure if this has any effect on gameplay whether you throw it away in the trash or release it back in the ocean/river.