How do I stop using my device for storage and only use iCloud instead?

You cannot.

iCloud storage cannot replace your device's local storage.

It is an additional service to store backups, and sync other content.

If using iCloud Photos, you can reduce the amount of storage they take up locally by turning on Optimize Storage in Settings->Photos. (only available if iCloud Photos is turned on).

For things like Apps, local documents, downloaded music, movies and books you need local storage.

You cannot "stop" using your device for storage. It must store some material at all times.

You can, however, store some less-referenced material in iCloud instead of your iPhone.

How to check the storage on your iPhone, iPad, and iPod touch - Apple Support