As has already been explained here, Amiga Workbench 2.05 and later can read and write DOS-formatted 720kB disks by virtue of a bundled program called CrossDOS. To function properly, however, this must be set up for each floppy drive attached to the Amiga.
Generally, the disks used must be DD (double density) type, because HD (high density) disks are unreadable on the Amiga. Some users report no problems with HD disks, however, and it looks like your Amiga's floppy drive can use them.
Such disks must be DOS-formatted to 720kB capacity, either on the PC or on the Amiga with CrossDOS installed. The Amiga will not read HD disks DOS-formatted to 1440kB, and the PC will not read DD disks DOS-formatted to 880kB capacity without extra hardware.