What is EntityStorage?
Entity storage is a storage controller for the entity that handles the actual CRUD operations of entity data in the storage. That means it is responsible for inserting and deleting the entity data in the actual storage/repository.

The storage can be a .yaml file (for config entities) or a SQL database (for content entities). There are some specific use cases for null storage (like e-mail message) which basically means no data is stored anywhere and entity with such storage is just virtual: It exists only per single request as you define it.

You can additionally write your own storage controller and use remote storage, a file, a stream or whatever the requirements are.