The "not supported in this forum install2internal script" repurposes two Android partitions for /flash and /storage. I forget exactly which ones are used but let's assume /system = /flash and /data = /storage. The goal of the script is to not mess with the Android partition scheme (some of which is intentionally hidden from Linux to stop users from bricking Android) so you are stuck with the sizes the original Android ROM for the box implemented for /system and /data (in your case, 4.5GB). It is possible to repartition the internal storage to create more space, but this is a non-trivial task using low-level tools (not normal userspace utilities) and it's not fun to resurrect devices or spoon-feed complex instructions to their pissed-off and panicing owners when things inevitably go wrong and the device is left in a "bricked" state. Hence we avoid the entire issue by not supporting install2internal. If you run from internal storage; whatever you problem is, it's not our problem.
To provide more info: The OS boots from KERNEL (the Linux kernel) and SYSTEM (userspace). On devices with more than 1GB RAM SYSTEM is expanded into RAM to create a virtual (read-only) filesystem. The /storage area has nothing to do with SYSTEM or the use of squashfs, so you cannot gain space by removing squashfs from the LE image. It is possible to create images that do not use a squashfs filesystem; but then the contents of SYSTEM have to be installed to internal storage not RAM, which will reduce the internal space available for /storage.
TL/DR: if you can't solve the issue yourself (as we don't provide guideance or support for the activity) you are stuck with 4.5GB and the best solution for everyone is that you continue to boot and use LE from the SD card.