To improve the performance of the compressed air energy storage (CAES) system, flow and heat transfer in different air storage tank (AST) configurations are investigated using numerical simulations after the numerical model has been experimentally validated. System performance for different AST placement methods is analyzed through numerical simulations integrated with the thermodynamic model of advanced adiabatic compressed air energy storage (AA-CAES). An in-depth study examines the impact of key system parameters on system performance with different AST configurations. Based on these analyses, the AA-CAES system with a constant volume of AST is optimized. The results indicate that horizontal placement of the AST improves heat transfer capability within the same working pressure range but results in slightly lower energy storage efficiency, achieving 64.61% compared to 65.50% for vertical placement. However, horizontal placement offers higher energy storage density, achieving 3.54 kW h/m3 under specific conditions, compared to 3.14 kW h/m3 for vertical placement. As the energy storage flow rate increases, exceeding the critical flow rate significantly improves heat transfer in vertically placed ASTs, thus narrowing the energy storage density gap between configurations. Increased turbine efficiency, additional external heat sources, and further utilization of compression heat provide more significant performance improvements for the AA-CAES with the AST placed horizontally compared to vertically. Compared to the AA-CAES with vertically placed ASTs, the configuration of the ASTs is optimized to enhance the electrical output of the AA-CAES by 76.4 MW h and reduce the input by 78.9 MW h at a storage flow rate of 0.5 kg/s.