So, I was just before the Polequin fight when I decided to start HoW. I'm looking at my inventory and finding that I have two full potion and scroll cases. I also kinda cheated myself in a bag of holding just because I have so many arrows and darts, along with a few other backup weapons, that I wanted to keep on hand. The thing is that I'm not even using the stuff, just collecting it and saving for a "rainy day" that never happens.

This happens with me in all D&D RPG games, though. IWD, BG, ToEE, even in PS:T I would hoard. I'm thinking I need to come up with a system to keep this under control. So, for example, I can only have one case of potions or scroll, and maybe only 5 quivers of arrows and a few stacks of darts on hand at any given time. Any excess must be sold at the next available opportunity. Is there a better system than this? Or, if this is the way to go, how do you recommend I cull my stash? Are there particular potions/scrolls/arrows/darts/etc. I should prioritize over others?

Refrain from save scumming and cast-spells-rest-rinse-and-repeat tactic (assuming you do) and instead use potions, scrolls and wands in difficult fights.
Makes the game more challenging and fun, and there's less stuff to be encumbered with.

I don't think that that's what he;s doing at all; when I play D&D RPGs, I usually wind up hoarding everything dropped; usually it gets sold (which worked out well in PS:T) or held on to until I need it. The latter almost never happened for various reasons; in BG1, it was because I was unable to pause the game to access them in my inventory (and my slots were already filled with the things I was most likely to need at any given time, such as healing potions, scrolls, wands, etc.), and in every other game the fights that I ran into where they would have been useful I was able to get through just fine without using them, so I decided to hold onto them for harder fights in which they would help out. I don't know, I guess it's part of me growing up used to games being stingy with resources and having to make those last few cans of whoopass unopened unless absolutely needed, but a lot of the potions and stuff sat in my inventory unused because I was sure that there would be a harder fight in which they would be useful, which almost never happened; not the harder fights part, lord no, those I got in spades, but never ones where it made sense to swig down a potion of fire resistance until after I had been burned to a crisp or a potion that eliminated crushing damage when I couldn't tell if the enemy was using a bludgeoning weapon or a slashing/piercing one.

I think I've reloaded three times in this game. Once was a Malavon fight that went tragically bad (too many gnomes died), the other two were with the final battle with Bhelifet(sp?) when he killed half my party. Exactly. I keep waiting for that massive fight where these various consumables will made a difference. I did use some of them for the final battle, but even then it was just four potions total.

You said it perfectly. when you said "contextual as hell", fortunately, after a few run throughs, you'll already know what potions to keep and what to sell. My last playthrough with a party of 5 fighters and 1 ftr/thief meant all my buffs were to come from potions but even then, I found out there was many potions I still didn't need.

In the first IWD IIRC, the Potions of Mirror Eyes were only needed for a section in TOTLM with the harpies but can also be used to counter umber hulk gaze. After that you could safely get rid of them. In my several IWD2 playthroughs, I only ever got petrified once and it was from a trap. Potions of Mirror Eyes in IWD2 is just baggage to be sold.

For stat potions, I've only kept the strength ones. My other characters are fine enough for the other stats that it's not worth carrying around potions. I kept those on hand for a while, but then ditched them. For Umber Hulks, I use Chaotic Commands on my main tank and send her in alone. I'm fighting harpies now. I'm not sure what their gaze does, but my tank is somehow immune.

Now that I'm in TotL, I have a legit bag of holding, which makes inventory management easier. But still, all this junk kind of weighs me down. What I'm tempted to do is not to allow resting until after a dungeon is finished, this way, I'll have to use potions when my cleric and mages run out of spells, but that would probably be too much of a drain.

Harpies cause fear so I'm guessing your tank is a pally :P.

There's two (three if you count outdoors) sections with harpies and the first two areas weren't too tough even without buffs, in the third area you will be surrounded pretty much seconds after you enter the area so you MIGHT need potions for that area as there's no guarantee the harpies will all go after your tank. I did it without pots but having party members under the effects of fear kinda stinks, I'll definately be bringing pots next time

Usually in games like this, I use some game areas as storage place.

You can store your items in various containers (just don't drop on floor), preferably those which are in towns (in case with IWD 1: Kuldahar - there is nice chest near smith).

Being a hoarder myself, I usually dedicate one container for storing rare gear, other - for consumables, third one - for scrolls, etc.

In IWD it is also useful to stockpile everything until very last moment when you need to buy something expensive (in example: +X gear from vendor). You will get more gold if you sell items in one go (and from one character); selling items of same kind in several batches will be less profitable due to market saturation.

That chest requires a key though which means you gotta lug it around anytime you wanna get into it

Hm, do we speak about different containers? I am speaking about the one in Conlan's Smithy. It is locked, but doesn't require key, my thief with 95 lock pick could open the chest without much problems (even more so - you will get +1 war hammer inside, which is very useful at start of the game). Well, if someone happened to not have thief in party or Knock spell, they can look for other convenient containers. I simply mentioned one of my favorite chests.

To my knowledge, there's only one chest in Conlan's Smithy and I was never able to pick the lock. When you bring back Conlan's son from Dragon's Eye, you get a key and that's the only time I was able to get it open. When I take the hammer from the chest, i put the key in and could never get it open again as the chest locks itself as soon as you close the inventory screen. My thieves usually have their search and lockpick skills maxed long before I complete the game (I ignore sneak and pickpocket skills) and they were never able to get it open. Never tried the knock spell or bashing it though, I'll have to try it on my next playthrough.

I use the crate in the second floor of the inn to store stuff that I probably want need anymore and can't get anyone else to buy. It's been safe so far.

Now, I'm in TotL and I actually have two bags of holding, one from the shop and the other from a battle. Are there space limitations in these like in BG? If not, I think I'll get rid of all the potion and scroll cases and just hoard everything possible in one of them.