I would simply make it possible for the player to carry 999 of every item outside of weapons and armor. Having to run back and forth in town every time just to move junk around is not engaging, does not add to realism or immersion. It is nothing but annoying and interrupts the game.
Spending very rare boss rewards on slightly upgrading your inventory size is also not a good mechanic. Players are now restarting the game over and over just to get some plague ichors to slightly lower the annoyance later on. Gamers are usually hoarders, so just give us the freedom to do so without it becoming an obstacle to enjoying the game.