1.) What uses the most User memory space?

That "1.6" (1.75) GB is samples. Samples that are added in addition to the factory ones. Either by importing sound files (WAV, AIFF) directly or by loading X7U, X7L, or X7A files that contain custom samples (Waveforms) and land in the user or library or both banks.

Note that the 1.75 GB of User Waveform memory is a part of "User Memory". It's a section that only has custom samples. User memory, when you add User Waveform memory, is greater than 1.75 GB. I haven't seen it as a size - but the other portions like song memory, arpeggios, etc have their own limits apart from the 1.75 GB.

2.) When I store Performances, recordings (whether with the MIDI recorder or Pattern recorder) & Performance settings, etc.,
Will the/that information be stored to the Montage using the User memory?

The act of storing a Performance doesn't use that 1.75GB (User Waveform Memory). It's loading sound files that does or loading user/library. If you make modifications to any Performance (user, library, or preset) then press the [STORE] button - pressing store doesn't use any of the 1.75GB. Any Waveforms your Performance is referencing will already be consuming its space before storing. It leaves the waveforms where they are and "points" to the Waveforms. This way you can [STORE] 10 copies of "the same" Performance that all use custom Waveforms and each copy will just reference one original set of the custom Waveform(s). MIDI (song) data has its own space. Still - with MIDI/song/pattern - we're talking atoms (less than crumbs) vs. the cake.

But yes, storing Performances and songs does use user memory. It just isn't this 1.75 GB people wish they had more of for user samples. So if that's what you're worried about - you can "ignore" the other things you could possibly save in user memory. They do have their own limits but rarely do you see anyone running into those. You can save 640 of your own custom user Performances in the user bank and another 5,120 if you use the Library area. The song/arp limit will depend on the number of events. I don't have those limits off the cuff.

3.) As Performances, recordings, creating Arps, creating my own sounds specifically from the preset parts,, etc., are made/created, the User memory begins to be used up.

Yes - but if you're making sounds from preset Parts - you're just using 1 out of the 640 user Performance spaces when you [STORE]. And you could move to the Library area if you run out of space in the user bank. Again, that 1.75GB doesn't start dwindling until you introduce custom samples/Waveforms.

Will using Montage Connect with a Daw free up space on the synthesizer?
I'm not clear if using Montage Connect by itself just stores the Performance & settings or if Montage Connect would be a external way to store info to free up User memory from the synthesizer.

No, Montage Connect doesn't do anything like that. The DAW doesn't do anything like that. Montage Connect will facilitate recalling Performances. It doesn't change or modify what's saved/stored/inside Montage's user memory.

4.) Would I be able to store info to a Daw to free up the User memory space on the synthesizer?

Well - not to save any of that User Waveform Memory (1.75GB). But, technically, yes you can use a DAW to "free up" User Memory in terms of Performances or Arps. I don't see why you would necessarily - unless, as hyperbole, you wanted say 20,000 different Performances and those won't all fit inside your Montage (5,760 total between user and library banks). But you could have your DAW store a bunch of different "Performances" that use MIDI commands - saved in your DAW - to setup your edit buffer with a Performance. This would be, in my opinion, a clunky thing - but you could do it. And then for ARPs - you could save MIDI that "unrolls" the ARPs so you could have your DAW play what an ARP would play and not have that ARP in your keyboard. If that was something that was somehow limiting for you. Rather than thinking this as a memory management technique - I see it as a workflow choice. Leveraging the DAW as a source of MIDI events or using the keyboard's internal features as the source. Or both. Rather than having a goal of saving memory - using the DAW may just be easier to construct MIDI events due to the larger screen, keyboard shortcuts, mouse gestures, etc.

It is wise to back up important data to an external storage device "always".

Yes, and yes again. Save often - keep your old save files. Name them something that makes sense. Include the date in the filename if you can since the files have no meaningful time stamps.

5.) Is a USB flash stick the only option?

The only supported option to save X7L, X7U, X7A files. The only supported option to save audio recordings (WAV) from the Performance Recorder. Not the only supported option to save song files (MID). The song files are "automatically" stored inside Montage. However, you can save (export) them to an external device. The USB flash stick is one option. However, Montage Connect can be used to "drag and drop" a song file to your PC. You can open a folder on your computer, open Montage Connect. Choose the "Song Import" bottom-row tab on Montage Connect. Then you can click-and-hold any one of the song files and drag it over to your computer's folder then let go. This will save a copy of the song (.MID) file and does not require a USB stick go-between. It makes a copy of what was inside Montage - it doesn't alter what's inside Montage. And you can't drag the other way - you can't drag a .MID file from your computer over to Montage Connect.

6.) Will using external storage devices free up User memory space?

Not on its own. Deleting will free up user memory space. Using external storage may "allow" you to delete items because you can always restore from backups, user, or library files if you wish to "un-delete" later.

"User memory space" is not 1.75GB. That's the User Waveform Memory space. If you want to free up User Waveform memory space - you can press [UTILITY] then "Contents" -> "Data Management", choose the "Waveform" folder, then randomly click on files and choose to delete them. This wouldn't be advised - but it leads you to a way to selectively free up Waveforms that are in your user area. You cannot one-by-one delete Waveforms that are inside your Library area - so this isn't the full picture.

You'll want to "prune" your Library content down to just the essential material you use. This would be regarded as the most effective memory management technique. This would involve first saving your user area. Also save a full backup just in case. Then wipe your user bank clean. Then import all Performances you use from the Library (or Libraries) you use to the user area using Library Import. Now your user area will have the Waveforms and Performances you want to keep. Save a Library file to create an X7L file you can use to load just your keepers later. Now you can delete those old libraries and only load your keepers. Hopefully this process also frees up sample memory. It doesn't necessarily have to. If you decide to keep Performances that do not allow freeing up any Waveforms - it may not free up any sample memory although you may have not imported many Performances. It depends on what you select and what those Performances utilize.

It's worth mentioning that the on-board menus do not give a very detailed picture of how much "space" each Performance takes and which Performances all use the same custom Waveform. If you were really interested in doing accounting with your synth to make it more lean in terms of memory utilization then you may consider use of 3rd party software. The John Melas tools have been the best tools available for this kind of work.