From my perspective, it is too weak to see play, or at least it's too inconvenient to bother playing, particuarly due to the blindness restriction. Analysis as follows.
+1 to Dexterity and +2 to Wisdom
What classes can use it to its full potential?
So, let's check your other features taking into account these classes. Surely, you could choose this race for Wizard, but then you are not that worried about balancing as you are already making a very suboptimal choice anyway.
+2/+1 is usual, so it's fine, by the way.
Weakness is a bad idea
In general, 5e has removed races' weakness. Unlike 3.5e for example, most playable races don't even have any stat loss. From PHB, the major weakness we have is Sunlight Sensitivity from Drow/Dark Elf, and they aren't a common race.
That said, this feature is going to make your race probably unplayable.
You have truesight to 20 feet, but are blind beyond that range.
Essentially, what it does is: you can't play the character as a ranged character. That strongly limits your options for Druid, Ranger and Cleric. All of them will have to play their melee styles (or play with constant disadvantage, allowing enemies to easily hide from you). It also limits the usefulness of their spells, since you won't be able to target anything that is far from you.
That also makes you quite vulnerable to ranged attacks, since they will have advantage against you. It also harms the roleplay, but that's probably not a problem when you are a milky orb with tentacles anyway.
Along the blindness, Ray of Frost will be mostly useless. As I said, you are (probably) playing a melee character, most weapon attacks will do more damage than the RoF. As both other spells are illusion image types, I don't see why RoF was chosen over Minor Image.
Other than that, the spells are fine and a similar progression to Tiefling's Infernal Legacy. Twice per day might be too much, usually race spells are once per day. I'll assume Wisdom is your spellcasting ability for these spells.
You can hover and have a flying speed of 35 feet. You do not need to breathe, but you do need food and water.
Flying is usually problematic, but honestly, the blinded condition actually solves most of the problems. You won't be a useful scout when you can only see 20ft, you won't be a flying threat 1st level out of range of your enemies because you are, again, probably melee, or attacking with disadvantage the whole game.
You are resistant to fire damage.
Same as Tiefling's Hellish Resistance. This one is fine.
When you aren't wearing armor, your AC is 12 + your Dexterity modifier.
This is strong, it's a free Studded Leather from 1st level. For Monk, as long as you have at least +2 in Wisdom, this is useless though. For other classes, it's strong but not overpowered in any way, since Studded Leather is a cheap armor choice and you can get higher AC, for example, from Scale Mail in the early game.
The Blindness condition probably makes the race unplayable. Even if you choose to play a melee character and most of the problems with the blindness can be ignored, the race has nothing too attractive that would pull someone to use it, as the other features are fine/strong, but nothing amazing. It's also quite unappealing from a RP point-of-view, since it doesn't offer extra languages or anything.
For a numeric reference, according to this point evaluation of race features (and some changes by me, in particular the -1 point deduction from Small is too severe imo), your race would have 6 points (+3 ASI, +1 Natural Armor, +1 Damage Resistance, +1 Innate Spellcasting, +.5 speed, -.5 small) if you just took out the flying and the blindsight, which would be a balanced race. As the Blind interaction with flying makes the flying lose most of its value (IMO), I would say that adding both conditions gives us around -1.5 point, resulting in a 4.5 overall race. Although the guide states some usual races from PHB as being in that range, as I mentioned earlier, the blinding condition probably makes actually playing it too inconvenient.
Are you sure you don't want a monster, though?
Sincerely, this race doesn't strike me as a playable race. I can't even imagine it communicating or wearing that cool magic armor, cloak or ring. Maybe it's lack of imagination from me, but I guess there is a reason for most playable races being kinda regular humanoids. As a monster, most of its weakness and OPness would actually be fine, you would simply need to balance the damage and defense for some given CR.