how do i make my pet storage hold more pets i can only have a certain amount atm

You need to expand your stables. Find a blueprint for a level 2 stable and select use, then look in Manor-reports-buildings and it will show you what materials and level of pet are required to build it.

got level 2 keeps asking 4 level 1

You need to build a level 1 stable before you can build a level 2, and so on :)

This can't be right.

You automatically have stable level 1. That's what everyone starts with. Yes, it says prerequisite is lvl 1, but it might as well not be there, since you have it, no matter what.

Also, considering that you currently have 19 pets if I didn't miscount and you say you run out of room, I would assume you in fact still only have level 1 Stable. Maximum amount of pets is 20 for a lvl 1 stable. 

So I don't know what the problem is, but it can't be the level 1 thing.

Did you find and "Use" the blueprint for lvl 2? You need to have 100 each of Clay, Stone and Wood and 5000 silver and a pet with at least 60 Constitution. Then simply head to Manor -> Craft & Construction to see a list of buildings you can make. You should then be able to select your pet from the dropdown menu next to it and start construction. Four hours later your stable will be done.

Should you indeed already have stable level 2, the principle is the same. Blueprint lvl 3, Use, materials needed are 150 of Stone, Clay and Wood, 10,000 silver and a pet with 65 Strength and Constitution. Manor -> Craft & Construction, select your pet in the dropdown, build.

Eventually you'll join the rest of us in desperately wanting a blueprint for Stable Level 5, and not knowing how to get it...

The only 'real' way to get the Blueprint level 5 is to go to the Portal in the battlefield at server reset and do the quest (asks you for 100 of a random items), and hope you get one.

Otherwise, it's buying/trading/asking for it.

Im trying to buy stable level 2 blueprint but it wont let me. I have enough coins but I still cant place the bid. What should I do?

You need one empty space in your inventory.