Can anyone tell me how to drop weight in this game? I've tried selling and storing items, but that only reduces the weight by a small amount. Can anyone help me?

Most of this is stored due to large amounts of items.
Potions, fragments, skillbooks ect
Use your skill books for starters.

Go to your camp and build Storage.
You can store items here and transfer them from chatecter to charecter within your Family.

Hope this helps!

are you not selling junk? (mob specific loot for silver) 

might be helpful to see your bag too.

 

if you arent selling the junk thats probably a big part of it.

if you go to a shop like the potion dealer they should have an option that says "sell all junk"

I'm selling all junk left and right. I have a lvl 3 storage unit built. Attached a shot of my inventory.

Over 2300 of the weight is from obscenely excessive amounts of potions.  Detailed in your other thread.

Store potions or sell them. I notice that 400 can take alot of weight.

Each item has a specific weight, times that by the amount of the it m you have and that adds up quickly. You can store some of each item without having to store all of them.