I'm not sure what is unclear about the options when removing a book, but, that is what you should do. Selecting the "Remove from My Books" should remove any sideloaded book from both the collection and the device. I haven't seen this not work except when the database on the device was already corrupted. And I can't think of a reason for the space not being freed. Or more space being used. Have you checked if the file was actually removed when connected to the PC?
You can also safely remove a book when connected to the PC. When the device is disconnected, it will check for any missing books and remove the details from the database before importing any new books.
If you are a calibre used, you can also use it to delete the books. This will remove the file and the database entries. This is the way I usually do any deletes as it is the easiest way to remove a group of files.
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