I have a 64GB iPhone SE 2020. More than half that memory is consumed by audio and a bit more by apps and data, leaving typically about 5GB-10GB free. In the past, I have always been able to manage my Music library on my Mac and sync to my iPhone. I did not need a ton of free space because most of the audio hadn't changed.
A while ago, the sync started to fail with an error dialog that 25 GB additional storage was needed on my iPhone. It was as if the sync process believed it needed to copy all my audio to my iPhone without deleting or overwriting the existing audio. I had other stuff to do and forgot about it, until today. Here's how I fixed it.
I assumed the audio on my iPhone was the problem. If I could delete all, or most, of it, then get a fresh copy from a sync with my Mac, all would be well. But the idea of going into my iPhone's Music app and individually deleting about 400 albums was pretty unappealing.
Fortunately, there's a way to mass-delete all non-purchased audio in Settings > Music. Find the Downloaded Music button. Select that button. You'll find an All Songs button. Swipe up for the Delete action and double-tap.
After that, the only audio on my iPhone was what I had purchased through the iTunes store, maybe 4GB. This allowed me to successfully sync from my Mac and get back the rest of my Music Library.
I hope this helps someone else struggling with the same issue.