Late into the questline you will discover how to unlock the inventory slots. You basically craft them. Personally I think it would have been more interesting to get them via achievments or quests.2 things.
one: is there a way to expand my inventory from just my hotbar to a bit bigger.
DrowElf has it exactly. Multiple bags help quite a bit. Try to upgrade them as you progress to golden bags of holding and then alchemist bags.can anyone tell me how to deal with the hotbar only restriction. combined with the smaller stacking sizes my mining trips are nightmares.