Final answer:
Sigmund Freud was the theorist who originally proposed that internal conflicts generate significant psychological stress, with most of our mental activity, including these conflicts, taking place in the unconscious mind.
Step-by-step explanation:
The theorist who first proposed that internal conflicts generate considerable psychological stress was Sigmund Freud. Freud's theories were focused on the internal strife caused by the struggle to reconcile one's desires with the requirements of society. He introduced the concept that the majority of our mental life, including these conflicts, takes place in the unconscious mind. These repressed memories and desires can lead to internal conflict, manifesting as psychological stress. Furthermore, Freud pioneered the systematic study of the workings of the unconscious mind as we associate with modern psychology.