Hi,
my I/O (is that the same as disk space?)
I/O isn't the same as disk space - I/O is the amount of disk read/write ("Input/Output" - hence I/O) activity that can be done in a set amount of time.
1Mb/s is fairly typical for budget hosting providers, I believe - though can make the backup take a while if you've got a very large site (which you have). Cutting the split size will help with that, though, by reducing the total amount of I/O needed. (When zip files are created, temporary files are created - and the smaller the zip files, the smaller the temporary files).
The only other thing you can do other than getting more disk space and reducing the split, is to go via FTP into wp-content/updraft and remove any temporary files (any ending in .tmp) that you find there. UpdraftPlus does that automatically after some time, but if you've hit your disk limit, it may be beneficial after reducing the split to clear out as much as possible rather than waiting for that.
David