Perhaps you misunderstood what iCloud is for. iCloud Photos isn't a separate storage device like an extra hard drive. iCloud Photos is a synchronization service. When you engage iCloud Photos on a device, then the Library on that device is kept exactly the same as the iCloud Photos Library, and vice versa. So, for instance, if you take a picture with your iPhone, it is added to the iPhone's Photos Library, copied to iCloud Photos Library, and then copied to the Photos Library on each of the other devices that you have connected. If you delete a picture on your Mac, then that picture is deleted at iCloud and on all the other devices. And, if you delete a picture on iCloud, it will be deleted everywhere else. That's what "synchronization" means.
If you are not interested in synchronizing these files with other devices, then iCloud Drive may not be a good choice. iCloud is not a backup service, it's a synchronization service. If you make mistakes in editing your files, those mistakes will be immediately copied to iCloud when you save.
If you're interested in using iCloud to save storage space on your phone you can use "Optimize Storage." If you set a device to "Optimize Storage," then Photos may store only smaller images on the device and rely on iCloud to keep the full sized images. This is great, since with the lower resolution images you can scan through pictures very quickly, and they look great on the screen. And, if Optimize is chosen, and you want to edit or crop a picture, Photos will reach out to iCloud to get a full sized image for you to work with. There may be some delay, of course. It's the same for editing or printing or anything that demands the full picture. Your optimized Library may take up less than 20% of the space of a fully downloaded Library. On my iPhone, Photos takes up way less than 10% of the space it uses on my Mac.
Does this make more sense?
