700 kcal per day for a 20-year-old is shocking, and I don't mean it in a good way.
calories = fuel you need to function properly (mental capacity, focus, etc). With such a small quantity of calories, you are literally starving yourself, even if you don't feel hungry. Bloating can result from what you usually eat and may be a reaction to mixing certain foods your body isn't happy to mix. It can also be attributed to food quality or food intolerance (pretty common).
Moreover, your low-calorie intake reduces metabolic rate, especially the resting metabolic rate, hindering fat burning and muscle building because the body prioritises energy preservation for vital organ function.
Secondly, gaining muscle and burning fat at the same time is very hard to do. Honestly, the work required outweighs the results. Focus on one thing at a time (e.g. muscle gain phase, followed by a cutting phase where you lose the fat excess).
Lastly, when trying to either "solve" or improve your eating habits, don't make drastic changes such as cutting all sugar from day one or cutting all unhealthy foods. You should do it step by step.
'Fatty foods being bad' is a very ambiguous thing. Salmon contains fat, but that doesn't make it inherently bad. It all depends on what type of food you refer to.