I just installed Discourse on an ubuntu VPS, I had to rebuild a couple of times because I kept messing up things such as smtp credentials and admin mail address, however I notice that there’s more than 12GB taken on my VPS (including the ubuntu system with required packages such as docker). Is this normal?
Yes, that sounds about right. You will need a bare minimum of 20G of disk for a small forum - 25G is better but can still be uncomfortable. You need 5G free space at the time of an update, after the new images are downloaded.
Remove the old containers and you will have more free space.