But from what I've learned the past couple of days trying to install ATV with marshmallow source on my Pi3 is that the disc image partitions the SD with default sizes. You need a good disk/partition tool like gparted on ubuntu to see ext4 partitions and resize them to a size that would suit your needs and capacity of the SD.
After that you can run the script again and install gapps without space errors.
Finally you should strongly consider using a Linux distro to flash and adb into your pi as it makes the process a whole lot smoother.
Hope this helps