Time Machine and iCloud Drive

BLD wrote:

Is it important for me to back up my files, documents, etc. on Time Machine even though I am using iCloud Drive?

They are 2 completely different services.

iCloud is a syncing service that if enabled properly, copies your iCloud drive folder, your Photos library and the Desktop & Documents folders to your iCloud storage. It is not a disaster recovery solution. Think of it more as convenience when using multiple Apple devices. Content like photos, contacts, messages etc. are accessible on all your devices.

Time Machine backs up the entire contents of your macOS system drive continually to a local external USB drive and offers you the ability to restore your Mac to a certain point in time in the case of your system drive becoming unavailable. You can also use Time Machine to get an older copy of a single file if you overwrite or deleted it by accident.

see >> https://support.apple.com/en-ca/HT201250

and >> https://support.apple.com/en-ca/HT208682

Both are excellent in storing your files, the only difference is iCloud has monthly fees. https://support.apple.com/guide/macbook-air/back-up-and-restore-apdc6980d3be/mac