Yes, that is what clearing the data does. It removes what is in there.
If your phone won't allow for added storage, like an SD card, then you will have to remove data to get anything else on it.
Now, a quick easy way to do that, is to connect the device to a computer via USB and then move all your photos, videos, music and a copy only of your contacts over to a folder on the computer. Now copy back ONLY those photos, videos and music you really actually use often. Now restart the phone and you should have a lot more room. You haven't lost the items mentioned because you moved them over to the computer. Saving them from deletion.
Also, you can delete things in apps that you don't use (the cache/data in individual apps) or uninstall the apps completely, that you don't use.