Two limits apply, and the error tells you which one you hit. Per file: 5 MB on Free, 50 MB on Pro, 100 MB with any storage add-on. In total: everything you sync must fit your account's storage (50 MB Free, 500 MB Pro, more with add-ons), so a full quota fails uploads even when the file itself is small. Any file type is accepted - there is no format restriction.
Check the storage bar in the Files view or under Settings > Storage, then pick the cheapest fix: free up space, upgrade, or shrink the file (phone photos are often multi-MB originals; a compressed JPEG is a fraction of the size). Uploads also need a connection: files do not queue while offline.
Help & FAQ
Answers and step-by-step guides: security, sync, pricing, and switching from other apps.