Well that's plenty of space either way. You might just keep the HD if it is working well. Use the CF in your PCMCIA SLOT instead (a cheap adapter needed for that).
Amiga programs are typically pretty small compared to todays computing. Octamed comes on just 2 floppies , back in the day. That's less than 2MB if they were completely filled.
In fact bazza1975, If you are just getting into the Amiga hardware - I recommend stick with the HD.
Oh, and Octamed is completely hard drive installable, no problems.
But 'sounds' like you're on your way
:-D