This is where I want the outlet, but there's a lot more wires here than the other outlets I've replaced. I'm a novice when it comes to outlets and wiring, so I'm not sure how to proceed with this. How should I wire this up? Do I need a certain kind of outlet? Any help would be much appreciated!
From what I am looking at it appears the box is being used as a transition from the underground UF conductors to Metal Clad Cable (BX) and yes it is really BX since it appears the ground is back wrapped around the metal cable at the connector, quite common back in the day.
Also if you look at the third wirenut from the left, you can see where a wire was cut but not made safe. You need to remove the wire nut and remove that tail and trim up the conductor and replace the wirenut. If you can you need to see if that wire is a true circuit or just an abandon wire.
Looking to the far right the it looks like the red conductor is being used as a grounding (green) conductor. You need to verify that this is true or false. If it's true, you need to get some green phase tape and mark it as such and everywhere else it appears in the circuit. If false, you need to figure out what it is.
Now that you have cleaned up the box. If you want to still put a receptacle there, you can purchase a handy box extension ring (an x-ring). This will extend the box out past the bottom stud and you can attach the receptacle to the Black and white conductors to the far left. I would check and I would make sure it's 120V before I did that. Also if you look at the back of the box you can see a bare grounding wire coming from the UF (probably attached to the back of the box), that would be where you need to ground your receptacle. I would use an industrial cover to protect the receptacle.
Now a quick safety note. Looking at the use of BX. This method hasn't been used since the late 1970's and it wasn't a very good system even then. It was part of the NEC but many municipalities outlawed it. So take your time, identify and label all of your conductors and make sure everything is operational. In fact I would recommend you tear out the entire BX system and install the new AC or MC type of cable which has a full ground.
So hope this helps, stay safe and good luck.
I need to ad that if this is a true garage the circuit/receptacle needs to be a GFCI.