Going off the example circuit I attached below, is the purpose of an internal resistor to limit the maximum current that the voltage source can output? Since adding any passive component in series with the internal resistor would just reduce the current.
No, it is not there purposely to reduce current, it is a parasitic effect.
If you look at a battery, it does not contain a separate resistor, it is just the structure and chemistry of the battery that causes internal series resistance.
Or a transformer, it also does not contain a separate resistance, it is the resistance of the copper coil itself.