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My character had begun to venture into the town, carrying a shovel and hammer, his only tools - searching for some material to offer Eliza. After wandering near the local tavern, he spots an apple tree nearby.

Obviously, you cannot snatch an apple from a tree if you're carrying a shovel in one hand, and a hammer in the other. After the tools were placed inside my character's depot, he examined the tree and eventually tugged on this apple.

I noticed that the icon of the apple wasn't in my hand. Instead, I found it in 'slot one' at the bottom of my screen. What exactly should my character refer to these slots as? I assume that they are pockets, but maybe not...

These slots are your pockets - yes.

If these are full, you need to find another solution to carry things. There are items like bags you can carry much more things inside. But find it out ingame

Thank you for the response, I appreciate it.