iPhone 5 free GB space

Doesn't really matter.

I've noticed that if I had less than 2 GB free on my (older) iPhone 4 (16 GB) it would be somewhat more sluggish at least at times. Not quite sure what the correlation might have been--although it was probably at least somewhat related to what apps I might have been running and how many of them--but that has been my observation, so I tried to have at least 2 GB free as often as I could.

There is a minimum to install/update but it really depends on what you're installing/updating. It is not, however, like a PC with an IDE drive where performance drops as you use up storage space.