Best cloud based server option for storage?

Hi, I run a Macbook Air with 120GB HD. This is now ridiculously full & I'm having trouble coming up with the best storage option for my iPhoto library (which is the main culprit I think).
I have a premium Dropbox account however this is not a solution at all as it needs to have the files on my drive as well as online. Is there any way to use Dropbox as an online server without having to store the files on my computer as well? If not (& I haven't found one) is there a cloud based server solution out there? I just want to make sure that my photos (in particular) & other files are safely backed up so I can delete them from my machine.
I also have a Time Capsule but when I try to store files on there I get a 'Time Capsule cannot be modified' error. Very frustrating as it has over 1TB sitting there unused.
Any solutions out there that you guys can help with? My preferred option would be to have something exactly like Dropbox that worked as a proper server so I could just drop files into my account & delete from my computer, knowing they're being backed up by a big company that has built in redundancy, allowing me to keep my rather small HD free.

How about replacing the SSD in your MacBook Air with a larger one? Depending on which model MBA you have, Mac Sales (OWC) sells replacement SSDs for the MacBook Air with instructions on how to do the replacement. Check out this link and prices.

Thanks chscag. I just went out & bought a 1TB pocket drive to use as a photo storage, that way it can also be backed up on time machine too. I'm still fruitlessly searching for the best cloud server option though, drives me mental that Dropbox doesn't have this functionality. I get that synching is convenient but I would much rather have an online receptacle for all my files that I could then access with my devices using them as client machines.

I understand what you're trying to achieve, however, finding an on line server that is fast and convenient might not be easy. Have you thought about using a backup service? They may not offer the access speed you need, but it's a way of storing large amounts of data such as photos, videos, music, graphics, etc.

Here's a review of 38 on line backup services which was done by "About.com" recently. Take a look and see if any of them offer the kind of storage and access that you need.