Perhaps you have misunderstood the purpose of iCloud Photos. iCloud Photos isn't a separate storage device like an extra hard drive. You can't keep pictures at iCloud instead of on your phone.
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. 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 at iCloud.com, 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.
So you can't think of iCloud Photos as a backup service, since it backs up mistakes, and there's no way to undo them. Whatever you do with Photos on your device-- it happens everywhere else. And you can't think of iCloud Photos as an extra hard drive, because iCloud Photos at iCloud.com always has exactly the same pictures as your phone.
You can use Optimize Storage on a Mac, on your iPhone, or on your iPad. If you set a device to "Optimize Storage,"on your iPhone, then Photos may store only smaller images on the phone 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. So, if Optimize is chosen, and you want to edit a picture, Photos will reach out to iCloud to get a full sized image for you to work on. It's the same for 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. But an optimized Library may be kept larger than that if the extra storage space is not needed.
If you are not interested in synchronizing these files with other devices, or saving storage though optimizing, then iCloud Drive may not be a good choice for you.
Does this make more sense?
