‘In’ and ‘inside’ are words that are more or less synonymous as prepositions, and can be used in most cases interchangeably. There is a subtle difference, however, which explains why ‘inside’ cannot replace ‘in’ in phrases like ‘in the thick of it’.
‘Inside’ is generally used to contrast with ‘outside’; therefore, it carries with it the strong suggestion of being physically enclosed. For example, to say ‘We were inside Russia’ sounds wrong, doesn’t it? This is because there is sense of being surrounded by walls, or tangible boundaries on all sides, when one says one is ‘inside’ something. It is almost strictly locative, which in grammar/linguistics refers to words that indicate location. For example, to say ‘The clothes are inside the cupboard’ sounds correct.
On the other hand, ‘in’ is used more generally; it carries no such suggestion. To go ‘in’ can mean simply to participate in something (I’m in the group), or to be at a place (I’m in Chennai); it does not conjure images of enclosures or walls, or being physically surrounded.